Selecting a good successor trustee (or co-trustees) to manage your trust after you die—or, if you’re married, on the last to die of you and your spouse—is one of the most important things you will ever do in connection with your estate planning.
Being a trustee can be a thankless and burdensome task, and the compensation an individual receives is often not worth the on-going headaches that may arise from preparing accountings and such things as bickering among, and dealing with requests from, beneficiaries. Because of the challenges, the individual you choose needs to view the duties of a Trustee as a service he or she is providing to your beneficiaries and to the deceased loved one. It is best that you ask the person(s) you desire to serve as your successor trustee if he or she is willing to so serve.
Typically, unless you have a very large estate, you will select one or more of your children, or if you do not have any children, a relative. For a very large estate, you may wish to appoint an institutional trustee, such as a bank.
Select as your successor trustee a person (or persons) you trust, someone who is level-headed and able to make decisions of a business nature. It is important your successor trustee has the ability to get along well with (that is, can “handle”) your beneficiaries. In fact, your selected successor trustee may himself or herself be a beneficiary. This makes it a little easier to justify the tough work ahead.
Sometimes selecting successor co-trustees (to act jointly) is a good idea—especially among siblings—since a brother or sister who was not asked to serve might have hurt feelings from being “left-out.” However, financial institutions may require that in the case you have appointed successor co-trustees, each co-trustee must have so-called “independent authority.” That is, each co-trustee must have power over the account without requiring the approval of the other co-trustee.
Since virtually every situation is different, at McEntyre & von der Lieth, PC, our expertise is ready to assist you with this process in considering all the factors before making your selection.
The above are generalizations only and should not be taken as legal advice for the reader’s particular situation.