A living trust ensures property can pass to you and other beneficiaries without the delays and expenses of probate court. However, while avoiding probate simplifies the estate distribution process, a living trust doesn’t eliminate responsibilities. As the Successor Trustee, you’ve inherited a critical role that requires careful attention, legal compliance, and dedication to fulfilling the trust’s purpose.

Understanding the Role of a Successor Trustee

In creating the trust, your father assumed two roles:

Trustor: The person who creates and funds the trust.
Trustee: The individual responsible for managing the trust during his lifetime.

Upon his passing, the role of Trustee transitions to the Successor Trustee, the person named to carry out the trust’s instructions. The Successor Trustee steps into this role with a fiduciary responsibility to act in the best interests of the trust’s beneficiaries.

Key Duties of a Successor Trustee

Duty to Disclose

Transparency is paramount. As a Successor Trustee:
You must inform beneficiaries that the trust has become irrevocable upon the Trustor’s death.
Beneficiaries have the right to request and review the terms of the trust. A complete copy of the trust document should be provided promptly upon request.

Duty of Care

This duty emphasizes the responsible management of trust assets:
Follow the Trustor’s instructions for distributing income and principal.
Avoid mingling trust assets with personal funds to prevent any appearance of impropriety.
Prudently manage investments, real estate, or other assets in the trust, ensuring their preservation for the beneficiaries.

Duty of Loyalty

The Successor Trustee must prioritize the beneficiaries’ interests above all else:
Avoid conflicts of interest or actions that could benefit the Trustee personally at the trust’s expense.
Self-dealing, such as purchasing trust property for personal gain at a discount, is prohibited unless explicitly authorized by the trust terms.

Additional Responsibilities

Successor Trustees may also need to:

  • Inventory and value the trust’s assets.
  • Settle outstanding debts and liabilities.
  • File necessary tax returns and address tax obligations.
  • Ensure timely and accurate distribution of assets to beneficiaries.

Why This Role Shouldn’t Be Taken Lightly

The position of Successor Trustee comes with legal, financial, and ethical responsibilities. Any mismanagement, even if unintentional, can lead to disputes, personal liability, or legal complications. California law, like many states, imposes strict standards on fiduciaries to protect the interests of beneficiaries.
Consulting an Attorney is Essential

If you’re serving as a Successor Trustee, seeking legal guidance from an experienced estate planning attorney is crucial. This attorney can help you navigate the complexities of trust administration, ensure compliance with state laws, and minimize risks associated with your fiduciary duties.
Bottom Line

Being a Successor Trustee is a serious responsibility, but with the right knowledge and professional support, you can successfully fulfill your role. Taking the time to understand your duties and seeking expert advice will ensure the trust’s purpose is honored and the beneficiaries’ interests are protected.

Contact the Law Offices of Tony J. Tyre, Esq., APC for more information about trust administration.