When does a Successor Trustee take over?
So, first of all, in order to know when they take over, we have to know what is a successor trustee. I often refer to them as backup trustees, because for most people when they set up a trust, particularly a revocable living trust, you set up the trust, and you are your own trustee. So you start out as trustee, you’re in control, it’s not seriously different than owning the assets outright. The successor trustee is the trustee that comes after you. So you name someone in your document to come after you when you can’t be trustee anymore. And so when might they come in?
Obviously, if you pass away, you can no longer be trustee. Your successor trustee is gonna step in. So when there is a death, a successor trustee steps up. Another time is incapacity. So whether it’s mental or physical incapacity, for whatever reason if I can no longer handle my assets, handle what’s in the trust, handle what’s going on, my successor trustee might need to step up and handle things while I’m alive. The third time that a successor trustee might step in is if I want them to. So I might specifically decide that I don’t wanna handle this anymore, I’m gonna let my kids do it and the successor trustee might step in then and that would be a voluntary situation.
There could be a situation where a successor trustee might step in where there’s been some kind of fraud or mismanagement on the trustee’s part. That would be more likely to happen if a successor trustee is not acting appropriately, we might end up removing them and moving on to a subsequent successor trustee. That’s not something that’s likely to happen in the first round of not committing fraud and mismanagement on my own trust. But those are the times that a successor trustee might step in.
So it is very important with planning to make sure that you pick who would be in charge and consider both what would happen if you had passed away, how they’re handling things for beneficiaries, but also whether this is someone that you would want to be in charge of assets while you’re alive, if for some reason you could not. So thank you very much, and please like and subscribe for more information, thanks.
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