What is a Successor Trustee?
When it comes to an irrevocable trust, a successor trustee is a lot like an understudy at a Broadway play. The successor trustee’s involvement only comes into play if and when somethings happens to the trustee named in the original trust documents.
While it’s a good idea to specifically name the successor trustee in the same trust documents in which the trustee is named, it doesn’t always happen that way. If the successor trustee is not named in the original trust documents, it may take a court filing to have the successor trustee appointed.
It is a requirement to name a successor trustee at the time when a revocable trust is created, but there is no such requirement when you create an irrevocable trust. That doesn’t mean it’s not a good idea. Whenever there’s an opportunity to make your desires for your trust more clear, it’s a good idea to do so.
The selection and appointment of a successor trustee is important because the successor trustee takes over the administration of your irrevocable trust in the event that the original trustee (through death, mental incapacitation, or other unlikely event) you chose is unable to perform the necessary administrative duties.
What are the Responsibilities of a Successor Trustee
As one might surmise, the successor trustee has the same administrative and other responsibilities as the original trustee named in the trust documents. The successor trustee is responsible for administering your trust in the manner set forth in the original trust documents. Depending on the duties set forth in your trust agreement, this may include taking care of financial disbursements, managing or selling businesses or real estate, settling debts, or other trust specific tasks.
If the directive of the trust agreement specifies the transference of trust assets and properties to specific beneficiaries upon the death of the trustor, the successor trustee must follow these directive even if the directives cause the trust to be dissolved. Selecting a successor trustee who will follow these directives, even when it means they will no longer have the business, is essential.
Sometimes, the trust documents require that the trust remain intact in order to facilitate the continued benefit of minor children or other beneficiaries. In this case, it is important to have a successor trustee capable of working and getting along with your beneficiaries. The successor trustee must be able to follow and execute your directives as set forth in the trust documents.
A successor trustee’s duties and responsibilities may include the following: