People may create revocable living trusts for a variety of reasons. They want financial stability as they age and control over their legacy after they die. They may transfer a variety of valuable assets to the trust to ensure their comfort later in life.
Typically, the people who establish revocable living trusts act as the initial trustee. They manage and distribute the assets in the trust on their own behalf. However, one of the important components of establishing a revocable living trust is to name a successor trustee.
What does a successor trustee do?
A trustee is the party who administers a trust. Oftentimes, more than one person may need to fill that role if the trust persists for multiple years. A successor trustee is a specific person who takes over the initial trustee’s responsibilities when they die or become permanently incapacitated.
The successor trustee is often not a beneficiary of the trust the way that the trustor is. Instead, they are usually a somewhat younger, potentially healthier individual who has the capabilities to manage financial resources and behave in an ethical manner.
A successor trustee has a fiduciary duty to the beneficiaries of the trust. Whether they need to administer the trust on behalf of an individual who has become incapacitated or carry out their wishes after they die, they should put the well-being of beneficiaries ahead of their own wishes.
Selecting the right person to serve as the successor trustee can be as important as properly funding a trust initially. Trustors sometimes choose two or more people to act as co-trustees to avoid abuses of authority and embezzlement from the trust.
Other times, they may hire a professional fiduciary. Such choices are reasonable in scenarios where they lack close family members or where all immediate relatives are beneficiaries of the trust. What matters is that there is someone competent and trustworthy to manage trust assets and distribute them according to the instructions of the trustor.
Those establishing trusts or updating their trust documents as they prepare for retirement may need help evaluating different candidates for the position of successor trustee. Empowering the right successor trustee can help ensure an individual’s safety and comfort when they are vulnerable and can help protect their legacy after their passing.