Upon the initial Trustee(s)' disability, legal incapacity, resignation or death the Successor Trustees manage the trust assets in the best interests of the Trustor(s).
Doctors or judges determine legal incapacity. A Trustee who begins having memory troubles may choose to temporarily resign by writing a note and notarizing it.
When the Successor Trustee arrives at the bank with a note of incapacitation / resignation or death certificate along with a valid identification, the bank will match the information with their records of the Successor Trustees and allow the Successor Trustee to access the accounts.
Do Successor Trustees get paid?
Most people don't designate specific amounts. Many trusts include clauses allowing fair and reasonable compensation along with reimbursement of expenses incurred.
Banks and trust companies often have published scheduled fees, typically charging 1%-4% annually of the net estate while their services are used.
Individuals serving as Successor Trustees often via trust language can not exceed the customary charges of corporate trustees in the same locality for similar services.
Their work is pimarily bookkeeping and accounting. Your Successor Trustee may choose to hire a professional estate accountant, with the estate picking up the tab. Their duties will be to:
Distribute the balance of the trust assets to the named beneficiaries
Collection and management of the trust assets will require the Successor Trustee to obtain the appropriate documents such as death certificates to forward to banks, life insurance companies, investment companies and any other institutions that may hold trust assets.
Individuals or a corporate trustee?
This question can be difficult but one option is using both.
Corporate trustees, such as Edward Jones Trust Company, are experienced in handling estate transfer and ongoing management. They are less likely to make procedural errors than family members listed as a Successor Trustee.
Individuals may do a better (or worse) job distributing assets to young beneficiaries for reasonable health, education, maintenance and support needs. They may have a better view of your liberal or conservative nature during requests from your beneficiaries than a corporate trustee. Close individuals may also be more aware of a young beneficiary's true nature.
Successor Trustee heirarchy
Most people list three or four Successor Trustees when they write their trust but the Successor Trustees typically don't act all at once.
You'll likely list one First Successor Trustee or two First Successor Co-Trustees to manage the estate. Upon his/her/their incapacition, resignation or death, you will have second, third and potentially a fourth Successor Trustee listed.
A Successor Trustee acting alone doesn't need approval for every transaction of a Co-Successor Trustee, so work can potentially happen faster. If the estate is large or management potentially burdensome, having a co-Successor Trustee might help - or hurt depending on the personalities of the people you select.
If only one or two individuals can reassure you of doing a good job, consider listing a Corporate Trustee as your "last-resort" Successor Trustee.
Before Trustees and Successor Trustees can manage assets in a Living Trust, assets must first be transferred to the Living Trust.
Related research terms:
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