19 May What to Do If a Trustee Becomes Incapacitated
When you set up a living trust, you name a successor trustee to carry out your wishes and manage your assets. But what if that person can no longer fulfill their duties? Illness, injury, or cognitive decline could exclude them from acting as your successor trustee. It’s not something anyone wants to imagine, but preparing for that possibility is a crucial part of estate planning.
We explain what happens if a trustee becomes incapacitated, and how to plan ahead to prevent any complications.
What Happens When a Trustee Can’t Fulfill Their Duties?
If the person managing your trust becomes mentally or physically unable to continue, the trust doesn’t just dissolve. Someone else needs to step in—and quickly. That’s why naming an alternate successor trustee is so important. In most cases, a well-written trust will already have a backup plan in place.
Your living trust documents should include:
- A clear definition of incapacity
Often, this means a written diagnosis or certification from one or more licensed physicians.
- Instructions for Naming a Successor
The trust document should name one or more alternate trustees and explain how they will be appointed.
Without this language, things can get complicated and potentially end up in court. That’s why working with an experienced estate planning attorney is so important when drafting a trust.
When Does an Alternate Trustee Take Over?
An alternate trustee may take over if the original successor trustee is unable to serve, either because of incapacity, resignation, or death. Once they have officially been appointed as trustee, they will take over all of a successor trustee’s responsibilities, including:
- Managing and distributing trust assets
- Communicating with beneficiaries
- Paying bills or taxes associated with the trust
- Handling investments or real estate
- Keeping records of transactions and decisions
- Following all the terms outlined in the trust
The transition can be smooth or rocky, depending on how the trust was written. If the language is vague or outdated, or if there’s a disagreement between family members, it can cause delays and conflicts.
Can a Successor Trustee Be Removed?
Yes, a trustee who is unable to fulfill their duties can be removed. To be able to remove a trustee due to incapacity, you’ll need to outline those terms in your trust documents. Some grantors allow a group of individuals or a “trust protector” to make the call. Others require a doctor’s confirmation or a court petition.
If the trustee refuses to step down, but their ability to manage the trust is clearly compromised, the court may need to intervene. That process can be stressful and time-consuming for your loved ones, which is why proactive planning is always best.
What Happens If There’s No Successor Trustee Named?
If no successor is named or if the person you appointed is unwilling to serve, the court will step in to appoint someone. This could be a family member, a professional fiduciary, or even a financial institution. But it’s far better to choose several alternates ahead of time, so you stay in control of your legacy. Some grantors choose to name co-trustees so that there’s always someone available to manage the trust, even if one person becomes incapacitated or passes away.
Let’s Make Sure Your Trust Has a Backup Plan
A solid estate plan needs to be functional, no matter what happens. That means planning for any circumstances, including the incapacitation of one of your trustees.
At Phelps LaClair, we help Arizona families build estate plans that cover all the “what ifs.” Whether you’re setting up a new trust or need to review an existing one, our experienced team is here to help. Contact us today to schedule an appointment so you can make sure your estate plan is solid, no matter what life brings.
Photo by Balazs Simon on Pexels used with permission under the creative commons license for commercial use 05/19/2025