How to Choose a Successor Trustee for a Living Trust

A revocable living trust is a powerful tool in estate planning that helps manage and protect your assets during your lifetime and ensures they are distributed according to your wishes after your death. One of the most important decisions in establishing a living trust is selecting the right successor trustee—the individual or entity that will take over the management of the trust if you become incapacitated or pass away. This person will have significant responsibilities, so it’s important to choose wisely. Here’s how to choose a successor trustee for a living trust.

1. Understand the Role of a Successor Trustee

The successor trustee will be responsible for managing the trust according to the terms you have outlined. This role can include:

• Paying your bills and handling your finances if you become incapacitated
• Distributing trust assets to your beneficiaries after your death
• Managing any ongoing trusts for minors or other beneficiaries who are not ready to receive their inheritance
• Filing tax returns and dealing with legal and financial matters related to the trust. 

It’s a significant responsibility that requires a level of financial understanding, organization, and integrity.

2. Consider Personal Qualities

When choosing a successor trustee, consider their personal qualities:

• Trustworthiness: The trustee will have access to your assets, so they must be someone you trust implicitly to act in the best interests of your beneficiaries.
• Organization and Attention to Detail: The role of a trustee involves a lot of paperwork, managing timelines, and ensuring compliance with legal requirements. Select someone who is organized, detail-oriented, and can stay on top of tasks.
• Communication Skills: A trustee will need to interact with your beneficiaries, lawyer, accountant, and possibly the court. Strong communication skills are essential.
• Financial Acumen: While the trustee doesn’t have to be a financial expert, they should be comfortable handling money and working with professionals like accountants or financial advisors to manage the trust’s assets.

3. Evaluate the Time Commitment

Acting as a trustee can be time-consuming, especially after a death when assets need to be distributed. Consider whether the person you’re thinking about has the time and willingness to take on this responsibility. A successor trustee needs to be able to dedicate the necessary time to manage your affairs properly.

4. Professional vs. Personal Trustee

You have two main options: selecting a personal trustee (like a family member or friend) or a professional trustee (such as a professional or corporate fiduciary).

Personal Trustee 

Many people choose family members because they know the individuals and trust them. A family member may also be more familiar with your situation and your beneficiaries, making them more sensitive to your wishes.

• Pros: Less expensive than a professional; has personal knowledge of your family’s dynamics.
• Cons: May not have the financial expertise or time required; can cause tension among beneficiaries if they feel the trustee is not acting fairly.

Professional Trustee 

If your estate is complex, you may want to consider a professional trustee such as a professional fiduciary. Professionals have experience managing trusts and can ensure that the trust is handled in a neutral, unbiased way.

• Pros: Expertise in financial and legal matters; impartiality; continuity (as a company can outlast any one individual).
• Cons: Can be more expensive than a personal trustee; may lack a personal connection to your beneficiaries.

5. Consider Co-Trustees

Another option is to appoint co-trustees, where two or more people work together to manage the trust. This is most popular when parents want to name two children as co-trustees who can work together to administer the trust. However, having multiple trustees can sometimes lead to disagreements, delays, and an increase in the cost of the trust administration, so be sure they can work well together.

6. Plan for Backup Successor Trustees

In addition to naming your primary successor trustee, it’s a good idea to name alternates. Circumstances may change, and your first choice may no longer be willing or able to serve when the time comes. Having backups ensures that your trust will always have a capable trustee in place.

7. Update Your Choice As Needed

As with any aspect of estate planning, the selection of a successor trustee should not be a “set it and forget it” decision. Your circumstances—and the circumstances of your chosen trustee—can change. Periodically review your trust documents with your attorney and ensure that your chosen successor trustee is still the best person for the job. If not, don’t hesitate to ask your attorney to update your documents. 

8. Seek Legal Counsel

Choosing a successor trustee is a crucial part of creating a living trust. It’s important to weigh your options carefully and consider the abilities, personal characteristics, and circumstances of your potential trustee. Whether you choose a family member, a friend, or a professional fiduciary, making the right choice ensures that your assets will be managed responsibly and according to your wishes, giving you peace of mind.

If you’re struggling with this decision or have questions about estate planning, consider speaking with an experienced estate planning attorney who can guide you through the process and help you make the best decision for your specific situation.

If you have any questions about how to choose a successor trustee for a living trust, feel free to contact our office.

Law Offices of Daniel A. Hunt

The Law Offices of Daniel A. Hunt is a California law firm specializing in Estate Planning; Trust Administration & Litigation; Probate; and Conservatorships. We've helped over 10,000 clients find peace of mind. We serve clients throughout the greater Sacramento region and the state of California.