What is a Successor Trustee

Successor Trustee Responsibilities

Use the trust for the benefit of the Grantor or beneficiaries. This is the primary duty of the successor trustee. They must pay the Grantor’s bills, sell their property, and deposit the monies into the trust based on the instructions in the trust document.

Distribute property based on the terms. After the Grantor’s demise, the successor trustee must follow the terms of the trust and distribute property in a way consistent with the trust document. Remember that revocable trusts become irrevocable after the Grantor’s death, so the successor trustee cannot legally change anything with the trust.

Pay creditors. Another primary successor trustee responsibility is to ensure all creditors are paid. The statute of limitations for creditor claims is two years following death. Therefore, the successor trustee should not start distributing assets unless all creditors have been paid. A partial distribution of trust assets may be wise, with some funds getting reserved until creditors get paid.

Making Investment Decisions and Settling Debts

The successor trustee has leeway with things like emergencies. They can use money from the trust to pay hospital bills for a beneficiary or pay off the estate’s outstanding invoices. The responsibilities of a successor trustee are diverse.

Successor Trustee Duties and Definition

A Successor Trustee oversees and administers a Trust after the creator of the trust dies. The Grantor often serves as the initial Trustee in a living trust but will eventually need a successor to take over. Grantors can nominate a close relative, family friend, or even financial institution to take on the role of Successor Trustee.

A Grantor names their Successor Trustee in a Declaration of Trust document. The Successor Trustee may have to look after the trust for several years. All of that will be explained in the Declaration of Trust.

Responsibilities of a Successor Trustee

The Successor Trustee acts with the beneficiaries in mind. Their duties include managing the trust and distributing assets — though the Grantor will determine the exact responsibilities. The successor trustee cannot make decisions in their interest. The roles of the Successor Trustees may also change based on whether the Grantor is dead or incapacitated.

How Does a Successor Trustee Take Over?

For situations involving a deceased Grantor, the roles of the Successor Trustees would start by informing family members, banks, and other interested parties about the death. As they proceed with notifying beneficiaries and providing copies of the Declarations of Trust, they should also coordinate with the Executors of the deceased’s Will to close accounts and settle debts using funds in the trust. Finally, Successor Trustees must divvy the property, disband assets and money to the beneficiaries, and close the trust.

The responsibility of a Successor Trustee may vary slightly if a Grantor were to be incapacitated. These instances require notifying family members and beneficiaries of the trust’s existence, gathering necessary data about the said trust, and applying to relevant disability benefits for the Grantor. The successor trustee’s duties include documenting all receipts and expenses and saving all records of communications.

What’s Involved During the Appointment of the Successor Trustee?

If you have been appointed a Successor Trustee, you must first meet with the Grantor to discuss your responsibilities. That’s how you will learn about the Declaration of Trust and other important documents. The Grantor will inform you of their unique expectations, giving you a clearer idea of your duties.

It is worth stating that you are not mandated to accept the successor Trustee role. The Grantor might have chosen you because you are their trustworthy friend, but even then, you are not obligated to accept this role. When creating a Trust, the Grantors likely think about alternative Successor Trustees—those who step in if the first choice declines.

Is the Successor Trustee the Same Executor?

An Executor is responsible for managing someone’s affairs after they die. Executors must promptly pay outstanding debts and taxes on the estate and distribute assets as specified in the last will. Their role is vital in closing all affairs in a timely fashion, like settling utility payments, paying rent, etc.

The Executor reports each of these duties to the county probate court and closes the estate when all instructions in the will are implemented.

As mentioned, the Trustee’s successors take over the trust’s management after the Grantor’s demise. The roles of Successor Trustees and Executors are somewhat parallel, and the two people may often collaborate after the Grantor dies. Depending on the specific trust, this responsibility could last many years if heirs are minors. Successor Trustees can work with executors, but their commitment only relates to the trust.

Is the Successor Trustee the same as the Trustee?

Trustees and Successor Trustees have similar responsibilities but work on different timelines. The Trustee is the one who takes over and starts running the trust as soon as it is created. The Trustee becomes the administrator of the trust’s assets and must manage them according to the terms set by the Grantor.

With a Living Trust, which is revocable, the Grantor is usually the person who acts as the Trustee. But in irrevocable trusts, the Grantor cannot be the Trustee- they must appoint someone else to be the Trustee and revoke all ownerships to the assets that they move to the trust.

A Successor Trustee comes later to ensure the trust’s continuity after the Grantor dies or the first Trustee quits/ is removed. The successor trustee’s responsibilities are typically the same as those of the original Trustee — although they often have the added task of concluding the trust.

Who Can Serve as Successor Trustee?

Choose a Successor Trustee you trust to handle your financial matters. You can choose your Trustee from among your beneficiaries based on who is likely to act per the terms of your trust. Wishes. Keep in mind that the courts won’t supervise them during the process. Handing all those responsibilities to a single person can be challenging, but ensuring the trust gets managed and closed correctly is crucial.

How to Sign as a Successor Trustee?

If you get nominated as a Successor Trustee, it’s up to you to accept or decline the offer. If you accept it, the Grantor will meet with you to review the Declaration of Trust. You will then wait until the time comes to start overseeing the trust.

All Successor Trustees should ensure the required filings are made and obtain permission to start in their roles after the Grantor dies. This typically requires serving beneficiaries and institutions the Death Certificate and the Trust agreement. The next stages are easy and involve simply following the responsibilities described by the Grantor in the terms of the trust.

The role of a Successor Trustee can last many years, and it often requires financial and legal expertise to complete. Grantors should think about this and decide in advance which candidates can handle this level of responsibility without bowing down to pressure. Remember, you can call in a professional like a lawyer or accountant.

If you have been chosen as Successor Trustee, take your time before you decide. You can also contact an attorney to help you make the right decisions for your loved ones.

Contact a Lawyer

Only experienced successor trustees understand the grueling task and the level of commitment to the role demands. Working with a highly experienced attorney can lessen the burden on your time.

Becoming a successful Successor Trustee takes collaborating with people of all backgrounds. Top among these are lawyers who can help get your affairs in order. Once you figure out the last will, you can structure a Trust strategy that aligns with your hopes and aspirations.

Contact us to learn more.