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Understanding the Role of a Successor Trustee in Your Revocable Living Trust



When you set up a revocable living trust, you typically name yourself as the first trustee to manage your money and property. But it's smart to plan ahead for a time when you might not be able to manage these duties yourself due to illness or after your death. This is when a successor trustee becomes crucial for implementing your estate plan.


Choosing a Successor Trustee

Picking a successor trustee is an important decision. This person could be an adult child, a relative, a close friend, or a professional like a bank trust department or a trust company. The role involves big responsibilities, so it’s important to choose someone who is reliable and capable of handling complex financial tasks. It's also a good idea to name a few backups in case your first choice can't take on the role.


Key Responsibilities

When you can't manage the trust: If you ever become unable to manage your trust due to illness, your successor trustee will step in. They will handle your finances, may sell or refinance property, and deal with trust-related transactions. They might also pay your bills and ensure you are taken care of.


After you pass away: The successor trustee will take on tasks similar to an estate executor. They will catalog your assets, pay off debts, handle your final tax returns, and distribute what you own according to the trust's instructions. This is done privately without court involvement, which keeps the process discreet and efficient.


Fully Funding Your Trust

It’s crucial that all the assets you want protected by the trust are actually put in the trust’s name. If not, the successor trustee won’t have control over them. This setup is key for making sure the trust works as you intend, both if you become incapacitated and after your death.


What Makes a Good Successor Trustee?

A good successor trustee is diligent, responsible, and open to seeking advice from professionals like lawyers or accountants when needed. They must follow the rules in the trust document and perform their duties honestly and carefully.


When choosing someone for this role, think about how complex your trust is and the type and amount of assets it includes. Depending on your trust's instructions, the trustee’s job could be short-term, just transferring assets after your death, or long-term, managing assets for future generations.


Compensation for Trustees

Being a trustee can take a lot of time and effort. It's normal and fair to pay your successor trustee for their work. Make sure your trust document clearly states how much they should be paid.


Choosing the right successor trustee is crucial for making sure your estate plan works as you want it to. Take your time to pick someone who can handle the responsibilities and complexities involved. This careful selection will help protect your assets and ensure they are passed on as you wish, giving peace of mind to both you and your beneficiaries.

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