What is a Successor Trustee?
A Successor Trustee is the trustee who serves after the death, incapacity, or resignation of the first trustee. They have the same duties and powers as the original trustee. Just like the original or first trustee, the Successor Trustee is the legal representative of the trust. The Successor Trustee has the authority to act on behalf of the trust.
They can be a person or a corporate fiduciary, such as a trust company or a trust department in a bank. The successor trustee must be honest and diligent in fulfilling their duties. A corporate fiduciary may be the best choice if there are different types of beneficiaries, such as a surviving spouse and children from a prior marriage.
A Successor Trustee is responsible for retitling trust-owned assets in their name as trustee of the trustee. This means if John Smith created the John Smith while he was alive, he probably titled his property as John Smith, Trustee of the John Smith Trust. When John dies, his daughter Sally is nominated as Successor Trustee. Sally must then retitle trust-owned property to hold the title as Sally Smith, Trustee of the John Smith Trust. The trustee has duties to the trust beneficiaries and no one else.
To learn more about Trustee Duties, check out our article, “20 ways your Trustee can be breaching their fiduciary duties.” Find out more about your rights as a beneficiary and how to secure your rightful inheritance.
What are the duties of a Successor Trustee?
Suppose the Successor Trustee was appointed because the person who created the trust is incapacitated. In that case, the Successor Trustee’s duties run only to the person who made the trust because they are the only beneficiary. If appointed because the person who created the trust died, then the Successor Trustee’s duties run only to the beneficiaries who inherit from the trust. If the Successor Trustee is one of the beneficiaries, they must treat themselves similarly to all the other beneficiaries.
Suppose your trustee is telling you they are doing something with trust property for any reason that isn’t written in the trust, then that’s a sign your trustee is not acting for your benefit. There is a long list of duties the Successor Trustee has to the trust’s beneficiaries.
The trustee has numerous duties so they can perform their work. This includes the duties to:
- Collect and hold trust property
- Add property to the trust
- Make deposits
- Manage trust property
- Make repairs
- Hold securities
- Pay trust expenses
- Hire people
That’s just a sample of the trustee’s powers. The point is the trustee is empowered under California’s Trust Law to carry out the terms of the trust and has a duty to do so.
The Role of the Successor Trustee
A successor trustee is a person or institution that manages a living trust property when the original trustee has died or become incapacitated. Their primary objective is to properly administer the trust assets according to the trust’s terms and in keeping with fiduciary standards. The exact responsibilities of a successor trustee will vary depending on the instructions left by the trust’s creator, also known as the Grantor.
When the trust is formed, the successor trustee is usually appointed to take over in case the primary trustee can no longer perform their fiduciary duties. That could be due to age, physical or mental health issues, lack of time or effort necessary for trust administration, voluntary resignation, or removal for violating fiduciary duties.
Upon appointment, a successor trustee must take several initial steps, including obtaining a copy of the trust agreement and reviewing it, inventorying the trust assets, and notifying any banks or brokerage firms of their appointment. They also have a duty regarding investments, which involves examining the retention and distribution of trust assets to ensure that the investment strategy reflects the trust’s terms and purpose.
The successor trustee is also responsible for the trust if the Grantor becomes incapacitated or unable to make decisions. The successor’s responsibilities will be the same as the trustee’s, though they often have the added task of settling the trust.
A successor trustee plays a crucial role in the management and administration of a trust, especially in the event of the original trustee’s incapacity or death. The terms of the trust guide their duties and responsibilities, and they are expected to act in the best interest of the trust’s beneficiaries.
More on your Trustee duties
If you would still like more information on Trust Litigation and removing a Trustee, check out our complete Overview of California Trust Litigation, available on our website. And if you have more questions about your rights as a Beneficiary and what you should know moving forward. It’s best to reach out as soon as possible.
Still having some trouble, have any more questions, or want to talk to someone about your case, please give us a call or fill out our Get Help Now form below. The longer you take, the more damage your trust could take. Please call us at (888) 443-6590, and we would be more than happy to see if we can assist you.