When creating a revocable living trust, it is common that the trustmaker(s) will serve as trustee and appoint a successor trustee to handle matters after their death. The successor trustee is the person who steps in and executes the trust administration after your death. The successor trustee will also step in should the trustmaker become incapacitated.
The successor trustee is responsible for settling your trust or managing it after your death. Here are some responsibilities of a successor trustee.
- Locating and gathering assets of the trustmaker(s)
- Collecting life insurance policies, annuities or retirement accounts
- Identifying creditors and paying off debt
- Appraisal of real property
- Handling the personal property of the trustmaker(s)
- Preparing and filing income tax returns and determining if an estate return is necessary
- Distributing assets to the beneficiaries
So, who should you choose? The person should be trustworthy. They definitely need to be organized. It helps if they are good with money. If possible, choose someone in close proximity to you.
It is common to choose your child as successor trustee. Many clients have difficulty choosing only one of their children, afraid they will offend the others. It is okay to choose two successor trustees, but ensure they can work together. We have seen many scenarios where the successor trustees begin to argue and it delays the process. It is also important to let your successor trustee know they have been appointed.
A few weeks ago I was meeting with clients to create their revocable living trust. We were discussing which child they should pick as successor trustee. They told me that their youngest child was an adventure seeker and he would likely be in some foreign country at the time of their death. Their oldest was very intelligent, but if she had $1.00 she would spend $20.00. Oddly enough, my oldest daughter is the exact same way. They chose their middle daughter because she is good with money and she is the peace keeper of the family.
Choosing a successor trustee is an important decision. It takes time to decide who should be appointed to this role. Be sure to speak with the person to ensure they want the responsibility. Once you have the successor trustee chosen, you’ll be able to rest easy knowing that your trust is in good hands no matter what life brings.