Setting up a trust allows the individual creating the trust – the grantor – to place property in the trust that will be managed by the trustee (often the grantor themselves) until the grantor passes away. However, many trusts will also name a successor trustee – a person who will be responsible for properly administering the trust should the trustee become either incapacitated or pass away.
What are the responsibilities of a successor trustee when the grantor has passed away?
Following the grantor’s death, the successor trustee is responsible for administering the property held in the trust in accordance with the grantor’s wishes. If you are a successor trustee, it is advisable to take the following actions:
- Gain an understanding of the property held in the trust and to whom it should be distributed. This will be outlined in the Declaration of Trust.
- Make the grantor’s loved ones aware that you are the successor trustee
- Notify any banks, insurance companies and the Social Security Administration of the grantor’s death
- Close out any unneeded accounts
- Provide copies of the Declaration of Trust to the beneficiaries (those receiving property from the trust)
- Secure a copy of the grantor’s death certificate. This may be necessary to prove that you as the successor trustee are legally allowed to distribute the property held in the trust.
What are the responsibilities of a successor trustee when the grantor becomes incapacitated?
If the grantor is still alive, but is incapacitated, it can create a different situation than if the grantor passes away. Ultimately, the duties of the successor trustee will be determined by the Declaration of Trust. In a situation where the grantor is still living, you as the successor trustee may be called upon to use the property that is held in the trust to care for the grantor and/or the grantor’s family. Similar to when a grantor has passed away, if the grantor should become incapacitated, the following are actions that should be taken:
- Gain an understanding of the property held in the trust.
- Make the grantor’s loved ones aware that you are the successor trustee
- Notify any banks, insurance companies and other financial institutions. You will need access to any accounts held in the trust.
- Coordinate with the appropriate parties to ensure that the grantor’s bills are paid
Do you have to accept being a successor trustee?
Being named successor trustee comes with significant responsibility. For various reasons, it may not be a good fit for the person selected by the grantor. You are by no means obligated to accept being a successor trustee. In this scenario, it is a good idea to notify the grantor as soon as possible that you cannot accept the duties so they can find a suitable person for the role. It is also important to note that the Declaration of Trust will often contain conditions for stepping down as successor trustee and naming a replacement, should you find yourself no longer able to handle the role.
What should you know before agreeing to be a successor trustee?
Before agreeing to be a successor trustee, you should thoroughly evaluate the several aspects of the role. These include the following:
- Are you confident you can handle and manage the trust?
- What is your relationship to the beneficiaries, and can you carry out your responsibilities as set out in the Declaration of Trust?
- Can you handle the emotional component of the role? If you know you may be uncomfortable carrying out the duties of successor trustee, it is best to let the grantor know so they can choose someone else.
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