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When a person creates a living trust they most often serve as the trustee of that trust while they are alive, but will designate a successor trustee to manage the trust when they die. Depending on how they set up the trust, this successor trustee may only be needed to manage the trust for as long as it takes to distribute the trust assets immediately after the grantor’s death. On the other hand, a successor trustee may be needed to manage a trust for an indefinite period of time, making periodic distributions to trust beneficiaries per the terms of the trust.

The Responsibilities of a Successor Trustee

A successor trustee must ensure that trust assets are managed properly and that distributions from the trust are made in a timely fashion according to the provisions of the trust. A successor trustee essentially has the same responsibilities that an executor named in a will has. Except, property that is owned by a trust does not have to go through probate.

Many people create trusts in order to have some control over how their assets will be managed when they become incapacitated or die. But, it is surprising how few people prepare their successor trustees for the responsibilities they will have when they take over management of the trust. However, because the role of the successor trustee is so important, it is vital that you talk to them in advance about what they should expect in terms of their responsibilities. And if you are not comfortable handling this conversation alone, a skilled attorney or mediation attonrey can help you with this as part of your estate planning process. Not sure if you can handle this conversation alone, the following information reviews what needs to be said to your successor trustee.

What To Talk To Your Successor Trustee About

The very first thing to remind your successor trustee is that the trust assets do not belong to them. Instead, they will be managing them on your behalf or for the benefit of others.

Next, you should familiarize your successor trustee with the terms of your trust and let them know where the trust document, its assets, and other vital documents are located.

After that, you should discuss the following points with your successor trustee in order to prepare them to manage your trust properly:

  • They will be required to abide by the terms of the trust document at all times.
  • They must not commingle the assets belonging to the trust with their own assets.
  • They must not use the assets belonging to the trust for their own benefit.
  • They must treat all trust beneficiaries equally. In other words, they must not show any favoritism.
  • They must invest trust assets  in a reasonable and prudent manner.
  • They must keep up-to-date and accurate records, file tax returns, and report to the trust beneficiaries as required.
  • They can enlist the help of professionals. This could mean hiring an accountant, a bookkeeper, a financial planner, an investment broker, and/or a corporate trustee.
  • They should consult with an attorney prior to selling or distributing trust assets. The attorney will help the successor trustee ensure that they are protecting the assets and the beneficiaries.

Contact An Experienced California Estate Planning and Adminstration Attorney

If you have created a trust or are thinking of doing so, make sure that you talk to your successor trustee about their responsibilities before it’s too late. For information on what you should talk about with your designated successor trustee, or for help with having this conversation, call Jarratt Martin Law, LLP at (925) 750-7795 to speak to one of our attorneys or attorney mediators.

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One Response to “Talking to Your Successor Trustee About Their Responsibilities”
  1. Nagma V. Clark says:

    Very informative article!!!

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