If you have a home and financial assets, you may have been advised to have an Estate Plan, more than likely, a trust, set up. This refers to the process of having an attorney draft documents to help avoid probate, protect, and transfer your financial resources in accordance with your wishes, and oftentimes, in a tax and cost-efficient manner.
So, there you are in the attorney’s office when the most difficult question is asked-who do you want to serve as your Successor Trustee?
Most people automatically assume their child or children should be named. If not them, then a relative or close friend. After all, they love you, and you feel they would be honored to serve.
While that all seems logical, take into consideration what you are really asking of his person.
The Successor Trustee is tasked with ensuring your hard-earned assets, personal belongings, and other valuables will be distributed to the people you choose. This role has big responsibilities and can require a lot of time and energy. The process of settling an estate can sometimes take years. Choosing the right person/people is crucial to achieving your peace of mind. Here are some questions to consider before you “ink” your selection:
- Are they willing to serve? Be sure you have that discussion up front and be honest about what it takes to do the job (we have resources to help you educate them on this role)
- Are they sophisticated enough to handle the role? Retitling stock, handling real estate sales, dealing with the IRS, creditors, and a host of other activities require varying degrees of knowledge. The Successor Trustee will have a lot to tackle to carry out your wishes. If they don’t have experience with these situations, be certain to provide them with your trusted advisors (i.e. attorney, financial advisor, tax consultant, etc.) information to help them be successful and not so frustrated in this role.
- Are they trustworthy? Trusts are private. Once drafted they aren’t entered into court or filed with any oversight agency. Meaning there is no one other than the Successor Trustee (and maybe your beneficiaries if you have given them copies of your trust) who know the details of your last wishes and estate distribution plans. You’ll want them followed to the letter, and this role requires someone who will not deviate from your plan.
- Are they organized and a good communicator? Successor Trustees don’t normally walk onto the job with a nice binder that is neatly organized with a road map of what needs to be accomplished. They most likely need to track down statements, bills, deeds, and a host of other items to make sense of the estate and what needs to be done. Along the way, they will need to interact with a host of people to accomplish these varied tasks, as well as report to the beneficiaries.
- Other considerations – geographically, are they close to where you reside? If you have named a “team” of successors, do they get along, do they trust each other, live close to one another, will they divvy up the responsibilities? Are you willing to have the estate compensate them for their role and is that perfectly spelled out in your estate documents? Age is another consideration-a Successor Trustee that is younger than you is a better choice than a relative or friend 10 years your senior. If you don’t have children, relatives or friends that can step into this role, you’ll need to seek out a professional Fiduciary Trustee to serve.
Finally, it is really important that you revisit your Estate Plan every few years to make sure your wishes are still the same, that tax and legal law hasn’t changed and impacted your plan, that your named beneficiaries are still applicable (deaths, births and divorces may require changes to your list), and most importantly that your Successor Trustee(s) are (a) still the best choice to fill this role, and (b) are still willing and able to serve.
As a full-service Wealth Management Team, we have experience assisting clients on this topic as well as serving as Advisors to their Successor Trustees. Call us to schedule time to discuss your questions.
This information is not intended to be a substitute for individualized legal advice. Please consult your legal advisor regarding your specific situation.
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