PART 2 – What are the pros and cons?
So, you’re creating or changing a revocable living trust and you are thinking about naming one of your children as the Successor Trustee. To recap, your Successor Trustee is the person who will step in to handle your trust assets when you become incapacitated or die. Is this wise?
Scenario A – Naming One Child as the Sole Successor Trustee
There are occasions when putting one child in charge of the money and property that their siblings will receive works out well and everyone stays friendly. Generally, in these cases the siblings
- were all the product of the same long-term marriage,
- were all aware of the parent’s estate plan before the death,
- were all similarly situated financially before the inheritance,
- were all very close before their parent’s death,
- lived close enough to each other to divide up any sentimental items among themselves while all siblings were present,
- equally shared the burden of care-taking for the deceased parent,
- had no addictions or gambling problems in their families,
- don’t allow their spouses or adult children to have a say in the probate or trust administration process, and
- the Successor Trustee’s only job was settling the estate and dividing up the assets equally for immediate outright distribution to all the siblings.
If this sounds like your situation, then naming your child as Successor Trustee may work out just fine.
Scenario B – Naming Multiple Children as Co-Successor Trustees
Some clients feel that naming all or a couple of their children as Co-Successor Trustees can help prevent conflict. However, this provides no guarantees. In fact, it can even be worse than naming only one child as Successor Trustee because now two or more people have to agree on everything and sign all the necessary paperwork. Banks and financial institutions dislike co-trustees because all it does is slow down any process and open the door for conflicts and lawsuits.
Typically, the successor trustee of a simple probate-avoidance living trust isn’t paid for their services. This is because the successor trustee’s only job often is to distribute the trust property to the trust beneficiaries soon after the grantor’s death and the successor trustee will probably inherit most of the trust property.
Conclusion. Bear in mind that naming one or more of your children as Successor Trustee often results in conflict or tearing your family apart. If this is a concern to you, then Part 3 in our series could provide some additional options for you.
Stay tuned for our upcoming article which addresses the subject of if you feel that your children would not make good successor beneficiaries due to their age, maturity, propensity for not getting along with siblings? What other alternatives are there?
Call us to set up a Free Consultation where our our attorneys will answer your questions and discuss your legal options.