A successor trustee refers to a person, or persons, tasked with managing and administering the terms of a trust when the trust’s creator called the grantor, can no longer administer the trust on their own. While that can refer to situations where the grantor has passed on, it can also apply to situations when the grantor becomes physically or mentally incapacitated and cannot handle administration of the trust.
Upon activation of their powers, a successor trustee will be responsible for administering the trust. The exact responsibilities of a successor trustee will vary depending on the instructions left by the grantor. Generally, the grantor has left specific instructions as to how the trust should be managed, including a specific listing of the successor trustee’s tasks and prescribed powers to complete those tasks.
A successor trustee’s specific tasks will depend on several factors, including the terms written in the trust, the condition of the grantor, and whatever local laws may impede the trust’s stated wishes. Those laws can apply to obscure examples such as an instruction to buy a specific property may be blocked by local laws relating to real estate purchases in a given area, for example.
Some potential duties can include:
- Filing Income Taxes
The grantor’s assets may require annual income tax reports to be filed, including tax reports to the Internal Revenue Service and property taxes due to the local government. The successor trustee will be responsible for any financial reports and payments based on the grantor’s assets.
- Managing Assets
This can include identifying the location of specific assets and ensuring no individual or organization attempts to access and use them without your permission. Managing assets may also require you to ensure the assets remain financially solvent prior to distribution to named beneficiaries, which can include annual appraisals and reports.
- Paying Bills
If the assets require regular maintenance, such as annual rental fees or monthly power bills, the successor trustee can be tasked with paying those bills. This may be accomplished by empowering the successor trustee to collect rents from tenants renting properties owned by the grantor, which could also grant them eviction powers and legal options to pursue any rents due by delinquent renters.
- Business Decisions
The successor grantee may be tasked with actively managing a grantor’s assets and estates until such time as the grantor can return to service. In those situations, the successor grantee may need to openly communicate with business associates and other entities in the discharge of their duties. For example, the successor grantee may need to communicate with the grantor’s stock broker, their maintenance professionals, or anyone else in business with the grantor.
Who to Select
While it may be tempting to name your best friend or family member, a good successor trustee will have the time, knowledge, patience, and the fiduciary competence to effectively handle the requirements associated with the trust. As such, it’s vital for the grantor to have a personal faith and professional confidence in their choice.
The selected individual has to be listed in the trust documentation, too. Otherwise, they have no legal standing to make decisions on your behalf.
Let Us Help
Selecting a successor trustee may seem like an overwhelming challenge but with the guidance of an experienced trust lawyer, like Carlsbad attorney Andrew Fesler, you can make a good choice. Mr. Fesler’s practice includes trusts and trust administration among other practice areas. To find out more about how we can help, contact the Law Office of Andrew Fesler today on line or by phone (760) 444-0943.