Responsibilities of a Successor Trustee

Responsibilities of a Successor TrusteeThere are many benefits to using a revocable living trust as part of your estate plan. Whether you are the grantor of a trust or named as a successor trustee, an estate law attorney can help you understand what their duties may entail.

What is a Living Trust?

A living trust is a legal entity created by a grantor who puts assets into it. While the grantor is alive, they can manage the trust and add or remove assets as they wish. The grantor must name a successor trustee, who takes over management of the trust should the grantor become incapacitated or pass away. Typically, assets in a trust do not have to pass through probate. However, it’s important to seek the counsel of experienced probate attorneys to ensure a trust is set up correctly.

Duties of a Trustee

One of the most important things to keep in mind is that a trustee’s main obligation is to safeguard the trust’s assets for the benefit of its beneficiaries or the grantor, if the grantor is still alive. A successor trustee may not mix trust assets with their own or use the trust assets to their benefit, unless it is part of the terms of the trust. Each state has its own laws and rules that regulate trustees’ responsibilities.

Responsibilities of a Successor Trustee When a Grantor Passes Away

In addition to protecting the trust’s assets, the duties of a successor trustee include:

  • Notifying the grantor’s family members and relatives that they are the successor trustee
  • Providing all beneficiaries with copies of the declaration of trust
  • Contacting the Social Security Administration, financial institutions, insurance companies, investment/retirement planning firms, and others to inform them of the grantor’s death
  • Implementing the trust’s instructions
  • Paying off outstanding debts and taxes or coordinating with the executor of the will to pay them
  • Preparing and filing all required tax returns
  • Paying the ongoing expenses of administering the trust until it is terminated
  • Distributing assets to the beneficiaries of the trust
  • Closing the trust once assets are distributed

When a Grantor is Incapacitated

If the grantor is Incapacitated, the successor trustee typically uses the living trust assets to provide for the grantor’s care and comfort while they are still alive. The trust instructions may also provide for the care of the grantor’s loved ones as well. Other duties include:

  • Taking necessary steps to secure and protect all of the trust assets
  • Notifying financial institutions and banks to obtain access to any accounts in the trust
  • Applying for disability benefits for which the grantor may be eligible
  • If the grantor has different agents for financial and health care powers of attorney, coordinating with them to take care of the grantor’s bills, taxes, investments, and any other financial issues, and ensuring the grantor receives the care they need
  • Keeping records and receipts for any expenses and bills that have been paid, and any personal expenses incurred in the course of the trustee’s duties

How an Attorney Can Help

Using professionals to help carry out the trust’s instructions can make managing it much easier. A wills and estate attorney can be a valuable resource and ensure the trust is properly administered. If assets in a trust are specialized, it may be a good idea to seek the advice of a lawyer who is familiar with that area of the law. For example, if a grantor includes rental properties in a trust, consulting real property lawyers can help you determine the best way to manage or sell them.