15 Jul Successor Trustee
When you put your assets into a Living Trust, you know that you, as the grantor, maintain full and complete control. You are also the Trustee. As a result, you get to decide what happens with those assets. And because you are the lifetime beneficiary, you reap the benefits of all income earning investments. We know this because at Phelps LaClair, we design and implement estate plans daily for people just like you. But what happens to your living trust if you become incapacitated? Will it be too late to name a successor trustee?
In our 40 years of experience writing estate plans, we know that one of the most important questions is: who will take over if I become unable to manage my affairs? These days, we understand the stealth and suddenness of illness. Whether it is quick to develop or slow, accidents and incapacitation can happen to any of us at any time without warning. Ultimately, death is another situation that calls for someone to take over. That’s why every living trust we design names a Successor Trustee.
A successor trustee acts on your behalf when you are unable to. If you become incapacitated or too sick to continue, the successor trustee will step in to manage your affairs until you get well again. If you pass away, your successor trustee will handle the details of administration in closing out your trust and distributing the trust assets to your beneficiaries. Because of these responsibilities, it is vitally important to choose the right person to be your successor trustee.
When does the successor trustee assume trustee duties?
Your living trust document should include criteria for determining when you cannot continue. This will often require signed letters from health practitioners stating that you are incapable of managing your affairs. Once this determination has been made, the successor trustee can assume his or her duties. It does not need any further authorization of a court.
Successor trustee responsibilities
The successor trustee will assume all of the responsibilities spelled out in the living trust. In finances, there will be a durable power of attorney. Usually, this will include paying bills, depositing income, overseeing investment and banking accounts, and other financial matters. All interactions of the successor trustee must be done for your benefit, not the successor trustee’s.
A successor trustee may also have a medical power of attorney to make medical decisions on your behalf. Your wishes and desires for medical treatment and end of life decisions will be spelled out in the trust. It is the duty of the successor trustee to consult with your doctors to determine when and how these will be implemented.
Resuming your own management
So many advances have been made in medical science that it is possible for a totally incapacitated person to heal enough to resume responsibility for themselves again. Your living trust can include a provision for you to take over from the successor trustee when certain criteria have been met. When these are fulfilled, the successor trustee can step aside until he or she is needed again.
To name a successor trustee will take much thought and discussion. The person you choose must be willing and able to take over anytime he or she is needed. Phelps LaClair is here to help you through the process of decision making. We have been designing living trusts for two generations. Let our experience guide you to a personal custom estate plan that will protect your assets and protect your future. Call us for a free, no obligation consultation. Don’t let unforeseen circumstances rob you and your family. Call today and gain peace of mind.
Images used under creative commons license (Commerical Use) 07/15/2020 Photo by Nicole De Khors from Burst