By Bethany Smith
Many clients decide on a successor trustee for their living trust to take care of their estate at death and think that is all they need to do. Many fail to realize that there are things they should let the successor trustee know so that they are prepared at the death(s) of the grantor(s) or settlor(s). The grantor is the person creating the trust. The grantor should make the successor trustee familiar with the trust and its provisions. The trustee needs to know where the trust document, trust assets, insurance policies including medical, life, disability, long term care and other important papers are located.
While you're bringing your successor trustee up to speed, make sure appropriate titles and beneficiary designations have been changed so that the trust is the owner.
Your designated successor trustees should know who the trustees are now, who other successor trustees are, the order in which they are to act, and if you will be acting alone or with someone else.
If you have been designated as the successor trustee, the most important thing to remember when you step in as trustee is that these are not your assets. You are safeguarding them for others: for the grantor (if living) and for the beneficiaries, who will receive them after the grantor dies.
As a trustee, you have certain responsibilities. For example:
You must follow the instructions in the trust document.
You cannot mix trust assets with your own. You must keep separate checking accounts and investments.
You cannot use trust assets for your own benefit (unless the trust authorizes it).
You must treat trust beneficiaries the same; you cannot favor one over another (unless the trust says you can).
Trust assets must be invested in a prudent (conservative) manner, in a way that will result in reasonable growth with minimum risk.
You are responsible for keeping accurate records, filing tax returns and reporting to the beneficiaries as the trust requires.
At Cooper, Adel & Associates we are here to help with the complexities of estate planning. Call us at 1-800-798-5297 for a free consultation.