Successor Trustees – How to Make a Smooth Transition

January 8, 2021

Living trusts serve many functions such as providing greater control over asset distribution, privacy, probate avoidance and tax benefits. All assets used to fund the trust are managed by the trustee for the benefit of the beneficiaries. A trust is designed to survive the incapacity and death of the grantor and trustee. When a trustee can no longer carry out his or her duties, a successor trustee must step in.

The trust document will typically designate a successor trustee at the time of its creation. All control over the trust assets immediately moves to the successor trustee, who must also abide by the terms and conditions of the trust, just as the original trustee did. Often there are additional alternative trustees named in case the first named successor is now unable or unwilling to serve.

Deciding on who to name as trustee or successor trustees requires careful consideration of the type of property managed by the trust. Certain skillsets may be required depending on the complexity of the assets. It is not uncommon for a successor trustee to be a professional fiduciary which requires a fee. The benefit of these professional trustees is that they are accustomed to taking over at a moment’s notice and understand trust language. They can get up to speed quickly and make a seamless transition in most cases.

For those who find themselves in new territory by taking over as a successor trustee, the first step will be to review the trust document with an experienced estate planning attorney. The attorney will help the successor in some of the following manners:

- Review all terms and explain legalese and procedures;

- Inventory the assets and check for current financial balances, appraisals or fair market value depending on the type of asset;

- Develop a calendar for on-going distributions and other deadlines per the terms;

- and make sure all beneficiaries are properly identified with updated addresses and contact information.

Taking the time to get organized on the front-end of the transition goes a long way to making sure the trust is properly administered going forward. If you are taking over as a successor trustee and need assistance in making a smooth transition, contact the experienced estate planning attorneys at Stouffer Legal in the Greater Baltimore area.

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