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Who Should I Nominate as my Successor Trustee?

I recently met with a client during the process of setting up her estate plan. When I asked her who she would like to nominate as her Successor Trustee, she looked at me with a puzzled look on her face. After I explained the purpose of the nomination, she said, "I don't know who it should be. In fact, among my circle of family and friends, I don't think I trust anyone to fulfill my wishes."

While my client's response was troubling and sad on one level, it was also enlightening for me as a practitioner on another level. The Successor Trustee plays an important role in the effective execution of any estate plan and should be chosen carefully.

If you have a revocable living trust, you probably named yourself as trustee so you can continue to manage your own financial affairs, but eventually someone will need to step in for you when you are no longer able to act due to incapacity or after your death.

Responsibilities of A Successor Trustee

At Incapacity: If you become incapacitated, your successor will step in and take full control of your finances for you--paying bills, making financial decisions, even selling or refinancing assets.

After Death: After you die, your successor acts just like an executor would--takes an inventory of your assets, pays your final bills, sells assets if necessary, has your final tax returns prepared, and distributes your assets according to the instructions in your trust.

Your successor trustee will be acting without court supervision, which is why your affairs can be handled privately and efficiently--and probably one of the reasons you have a living trust in the first place. But this also means it will be up to your successor to get things started and keep them moving along.

Who Can Be Successor Trustees

Successor trustees can be your adult children, other relatives, a trusted friend and/or a professional or corporate trustee (bank trust department or trust company). If you choose an individual, you should name more than one in case your first choice is unable to act. Above all, your successor trustee(s) should be people you trust, people whose judgment you respect, and those people you are confident will carry out your wishes.

Actions to Consider

  • When choosing a successor, keep in mind the type and amount of assets in your trust and the complexity of the provisions in your trust document. For example, if you plan to keep assets in your trust after you die for your beneficiaries, your successor would have more responsibilities for a longer period of time than if your assets will be distributed all at once.
  • Consider the qualifications of your candidates, including personalities, financial or business experience, and time available due to their own family or career demands. Taking over as trustee for someone can take a substantial amount of time and requires a certain amount of business sense.
  • Be sure to ask the people you are considering if they would want this responsibility. Don't put them on the spot and just assume they want to do this.
  • Keep your successor trustees informed of any changes to the trust terms and provisions. Provide them a copy of your trust document.
  • Trustees should be paid for their work; your trust document should provide for fair and reasonable compensation.

If you have further questions about your specific situation, then please don't hesitate to contact me. I am 100% dedicated to meeting your needs and will use my experience as a San Jose estate planning lawyer to help you figure out a good solution.