Trustees help manage trust resources. Some people create trusts for their protection when they age. They immediately pass certain types of responsibility to another person who acts as trustee. They choose an individual they know or hire a professional fiduciary to manage trust assets.
Frequently, individuals may serve as the trustee of the trust that they create. Particularly when they hope for the trust to provide ongoing support to their loved ones or to limit probate complications after their passing, they may need to select a successor trustee.
A successor trustee takes over the responsibilities of trust administration when the original trustee becomes incapacitated or dies. Who generally needs to select a successor trustee when creating and funding a trust?
One kind of trust requires successor trustees
When an individual decides to create and fund a revocable living trust, they typically act as the initial trustee on their own behalf. They transfer certain assets to the trust and then manage them for their own financial comfort throughout their working life or during their golden years.
However, when the person who established the trust dies or becomes incapacitated due to medical challenges, someone else may need to take over trust administration. Choosing a successor trustee is a critical component of establishing a functional revocable living trust.
The role is so important that some people hire professional fiduciaries to manage the trust when they become incapable of doing so. Others may choose two or more people to act as co-trustees so that there is less reason to worry about a trustee abusing their authority or proving incapable of adequately managing trust resources.
The right trustee is healthy and young enough to be available for trust administration after the trustor passes. They also need to be organized enough to manage trust resources. Additionally, the trustor needs to know that they are ethical enough to put the best interests of beneficiaries and the instructions provided by the trustor ahead of their personal wishes.
Choosing the right type of trust and the right person to serve as trustee can be as important as using the right assets to fund the trust and including the right instructions in the trust documents. Those intending to create a trust or update an existing one may need help evaluating their circumstances to ensure the trust helps them achieve their goals.