A revocable living trust is a powerful estate planning tool that can help you manage your assets during your lifetime and efficiently transfer them to your beneficiaries after your death. An important aspect of a living trust is the role of the successor trustee. Let's explore this important position and how it can affect your estate plan.
What is a Successor Trustee?
A successor trustee is the person or entity designated to take over the management of your trust when you're no longer able to do so, either due to incapacity or death. While you're alive and capable, you typically serve as the initial trustee of your own revocable living trust, maintaining full control over your assets.
Responsibilities of a Successor Trustee
During Incapacity
If you become incapacitated, your successor trustee steps in to manage your financial affairs. Their duties may include:
- Paying bills and taxes
- Making financial decisions
- Safeguarding your trust assets
- Potentially selling assets
After Death
After your passing, the successor trustee's role becomes similar to that of an executor of a Will. They will:
- Take inventory of trust assets
- Pay final bills and taxes
- Prepare final tax returns
- Distribute assets according to your trust instructions
For Ongoing Trusts
If your trust continues for the benefit of your children or other beneficiaries, the successor trustee will have ongoing responsibilities, including:
- Managing trust assets
- Making distribution decisions
- Communicating with beneficiaries
- Ensuring compliance with trust terms and applicable laws
Choosing Your Successor Trustee
Selecting the right successor trustee is important. Here are some options to consider:
- Your spouse: If you're married, your spouse can be a natural choice as the initial successor trustee.
- Adult children: Your grown children may be suitable candidates, especially if they're financially responsible.
- Other relatives or friends: Consider trusted individuals who understand your wishes and family dynamics.
- Professional trustees: Banks, trust companies, or individual professionals can offer expertise and impartiality.
When making your choice, consider factors such as:
- Financial and legal knowledge
- Time availability
- Impartiality
- Trustworthiness
- Understanding of your wishes
Remember, you can name multiple successor trustees or designate backups if your first choice cannot serve.
Why Professional Guidance Matters
Choosing and instructing a successor trustee is a significant decision that can impact the effectiveness of your estate plan. As an experienced estate planning attorney, I can help you:
- Understand the full scope of a successor trustee's responsibilities
- Evaluate potential candidates
- Structure your trust to provide clear guidance to your successor trustee
- Ensure your trust complies with Michigan law
Don't leave the future of your estate to chance. Feel free to contact me, Andrew Byers, at my law office in Troy, Michigan. I am an experienced estate planning attorney and I enjoy guiding my clients through these critical decisions so that they can create a comprehensive plan that protects their family and assets. You can contact me now by using the online form or calling me directly at (248) 469-4261. On this initial call, I'll answer your preliminary questions and get some background information to make sure it's a situation I can help with. After that, you can decide if it make sense to schedule a more in-depth consultation.
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