When creating a revocable living trust, the grantor or someone they can count on can serve as its trustee. However, a trustee may become unable to fulfill their duties for a number of reasons such as death and incapacity. In that case, a successor trustee can step in.
What is a successor trustee?
A trustee administers trust assets and disburses them to beneficiaries in accordance with the grantor’s wishes. The grantor can act as the initial trustee, or they can choose someone they have confidence in such as a sibling or a friend.
However, a trustee may become unfit to serve if they die, become incapacitated or breach the trust document. Without a trustee, the trust’s assets will be left unmanaged and may stop the beneficiaries from receiving what is due to them.
Fortunately, the grantor can avoid this by naming a successor trustee. This person can take over and carry out the responsibilities the grantor left for them in the Declaration of Trust.
Responsibilities of a successor trustee
The Declaration of Trust is a document that says what the trustee is responsible for and how much power they have. It also inventories the assets held in the trust and how to administer them.
Generally, the successor trustee carries out the same responsibilities as the initial trustee. They bear the responsibility of overseeing the trust’s assets and distributing them to the named beneficiaries with as little waste and loss as possible.
The duties of a successor trustee often include the following:
- Notify the family, beneficiaries and financial institutions of the grantor’s passing
- Provide beneficiaries with copies of the Declaration of Trust
- Work with the executor of the grantor’s estate to settle any outstanding debts
- Account for any expenses paid using the trust
- Close the grantor’s accounts if they are no longer necessary
- Distribute the assets of the trust to beneficiaries as per the grantor’s instructions
Grantors may rest easier if they have a successor trustee. Knowing that no matter what happens, their loved ones will have support, can be a comfort.