How Do You Choose a Successor Trustee?

Before we answer the question that serves as the title of this post, we need to provide some background information. If you have always thought that you should use a will when you get around to planning your estate, you should consider a living trust first.

Let’s look at the benefits, and then we will drill down and examine the successor trustee choice.

Multi-Leveled Control

Some people steer clear of trusts because they harbor a misconception. They think that you surrender all control of assets that you convey into a trust, but this is not the case.

When you have a revocable living trust, the “revocable” designation is quite literal. You can revoke or rescind the trust at any time. Short of this, you have absolute control of the assets every step of the way, because you will be the trustee while you are living.

It is possible for a married couple to establish a shared living trust, and this can be the ideal solution for some families. This being stated, we will not get into the details here, because it will complicate the explanation.

A lot of people have concerns about the money management capabilities of their heirs. If you use a will to state your final wishes with regard to asset transfers, there are no protections on this level. The people that are named as beneficiaries receive lump sum inheritances, and they are on their own.

When you have a living trust, you are not constrained in this manner. If you have these concerns, you can establish guidelines. The assets would be protected from the beneficiary’s creditors after your passing. Plus, you can dictate limited inheritance distributions over an extended period of time. In essence, you still have control of the trust in some ways after you are gone.

Successor Trustee Selection

Now that we have set the stage appropriately, we can get to the point of this post. When you are establishing the trust, you have to name a successor trustee to manage the trust after your death. You can also give the trustee the power to administer the trust in the event of your incapacitation.

The incapacity protection is key, because a very significant percentage of elders become unable to manage their own affairs. Alzheimer strikes over 30 percent of the oldest old, and this is not the only cause of incapacity.

Your successor trustee will have a lot of responsibilities. They may be managing income producing resources, and there are tax implications and legal guidelines that must be followed.

Conflicts of interest can enter the picture as well. If you want the trust to remain active for a number of years, longevity will also be a consideration.

If you are going to designate someone that you know personally, you should take the responsibilities seriously. The trustee should have a significant level of financial and administrative acumen, and there is the matter of potential favoritism.

You should definitely make sure that the person that you want to name is willing to assume the role. This may seem like an overstatement of the obvious, but you should be absolutely certain before you finalize your plan.

There is another option if you do not know someone that would be a suitable trustee. Trust companies, the trust departments of banks, and other professionals provide trustee services for a fee. This can be the right choice when certain circumstances exist.

We Are Here to Help!

As you can see, a living trust can be a very effective estate plan centerpiece. This being stated, there are other possibilities, and the right choice will depend on the situation. Personalized attention is key, and this is what you will receive when you choose our firm.

If you are ready to get started, you can send us a message to request a consultation appointment at our Oklahoma City estate planning office. There is also a contact form on this site you can use if you would rather send us a message.

 

 

After helping his own family deal with a lengthy probate and the IRS following his father’s untimely death in a farm accident, Larry Parman made a decision to help families create effective estate plans designed to reduce taxes, minimize legal interference with the transfer of assets to one’s heirs, and protect his clients’ assets from predators and creditors.

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