Successor Trustee

As a Folsom estate planning lawyer, a large portion of my practice is dedicated to trust creation and management, and trustees play a very important role in this process. A successor trustee is an individual or entity designated to take on the responsibilities of a trustee in a trust arrangement if the original trustee is unable or unwilling to continue in their role. Successor trustees play a crucial role in managing and administering a trust, ensuring that the trust’s terms and provisions are upheld and that the assets within the trust are managed appropriately. Here are some key points to understand about successor trustees:

1. Appointment: A successor trustee is typically named in the trust document itself. When creating a trust, the grantor or settlor (the person who establishes the trust) will designate one or more successor trustees in case the original trustee is unable to perform their duties, often due to incapacity, resignation, or death.
2. Duties and Responsibilities: The successor trustee assumes the same responsibilities and duties as the original trustee, as outlined in the trust document. These responsibilities may include managing and investing trust assets, distributing income and principal to beneficiaries, keeping accurate records, and ensuring the trust’s terms are followed.
3. Fiduciary Duty: Like the original trustee, the successor trustee has a fiduciary duty to act in the best interests of the trust and its beneficiaries. They must manage the trust prudently and impartially, avoiding conflicts of interest.
4. Succession Plan: The trust document should specify the order of succession for successor trustees. For example, if the initial successor trustee is unable to serve, the document may outline the appointment of additional successor trustees in a specific order.
5. Professional Trustees: Successor trustees can be individuals, such as family members or friends, or professional entities, such as banks or trust companies. The choice of successor trustee will depend on the grantor’s preferences and the complexity of the trust.
6. Trust Termination: In some cases, a trust document may specify that once a certain event or condition is met, the trust will terminate. In such cases, the successor trustee may have the responsibility of overseeing the distribution of trust assets to the beneficiaries in accordance with the trust’s terms.
7. Legal Requirements: Successor trustees should be aware of and comply with legal requirements in the jurisdiction where the trust is administered. These requirements can vary, and trustees may need to seek legal or financial advice to ensure they meet all obligations.
8. Communication: Good communication with beneficiaries is important for a successor trustee. They should keep beneficiaries informed about trust matters and decisions, as well as their rights and interests.

Conclusion

In summary, a successor trustee is a designated individual or entity who steps in to manage a trust when the original trustee is no longer able or willing to do so. They must carry out their fiduciary duties and adhere to the terms of the trust document. The appointment of a successor trustee provides a crucial safeguard for the proper administration of the trust and the protection of the beneficiaries’ interests. If you are seeking the guidance of a Folsom estate planning lawyer or have any questions about successor trustees, contact Thapar Law at 916-579-0605 or send us a message.