Living Trust Arizona

Successor Trustees

One of the most important decisions made with a living trust are the appointments of Successor Trustees. We provide a thorough Successor Trustee Guide to assist our clients' Successor Trustees.

When do Successor Trustees take action? Upon the initial Trustee(s)' disability, legal incapacity, resignation or death the Successor Trustees manage the trust assets in the best interests of the Trustor(s) or beneficiaries. Doctors or judges determine legal incapacity. A Trustee who begins having memory issues may choose to temporarily resign by writing a note and notarizing it. When the Successor Trustee arrives at the bank with a document indicating incapacitation / resignation or death certificate along with valid identification, the bank will match the information with their records of the Successor Trustees and allow the Successor Trustee to access the accounts. Do Successor Trustees get paid? Most people do not designate specific amounts. Many trusts include clauses allowing fair and reasonable compensation along with reimbursement of expenses incurred. Banks and trust companies often have published scheduled fees, typically charging 1%-4% annually of the net estate while their services are used. Individuals serving as Successor Trustees often via trust language can not exceed the customary charges of corporate trustees in the same locality for similar services. Back to top

What do Successor Trustees do? Their work is pimarily bookkeeping and accounting. Your Successor Trustee may choose to hire a professional estate accountant, with the estate picking up the costs. Their duties will be to: Manage assets during the initial Trustee(s)'s incapacitation, similar to a Financial Power of Attorney. Collect and manage assets Pay creditors, taxes and expenses Distribute the balance of the trust assets to the named beneficiaries Collection and management of the trust assets will require the Successor Trustee to obtain the appropriate documents such as death certificates to forward to banks, life insurance companies, investment companies and any other institutions that may hold trust assets.

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Individuals or a corporate trustee?

This question can be difficult but one option is using both.

Corporate trustees, such as Edward Jones Trust Company, are experienced in handling estate transfer and ongoing management. They are less likely to make procedural errors than family members listed as a Successor Trustee.

Individuals may do a better (or worse) job distributing assets to young beneficiaries for reasonable health, education, maintenance and support needs. They may have a better view of your liberal or conservative nature during requests from your beneficiaries than a corporate trustee. Close individuals may also be more aware of a young beneficiary's true nature.

Successor Trustee heirarchy

Most people list three or four Successor Trustees when they write their trust but the Successor Trustees usually do not act all at once.

You will likely list one First Successor Trustee or two First Successor Co-Trustees to manage the estate. Upon his/her/their incapacition, resignation or death, you will have second, third and potentially a fourth Successor Trustee listed.

A Successor Trustee acting alone does not need approval for every transaction of a Co-Successor Trustee, so tasks be handled quickly. If the estate is large or management potentially burdensome, having a Co-Successor Trustee might help - or hurt depending on the personalities of the people you select.

If only one or two individuals can reassure you of doing an adequate job, consider listing a Corporate Trustee as your "last-resort" Successor Trustee.

Before Trustees and Successor Trustees can manage assets in a Living Trust, assets must first be transferred to the Living Trust.