One of the critical roles when establishing a trust is the trustee. This position has significant responsibilities, such as holding or managing assets for the grantor and beneficiaries. These duties also impose a high standard of honesty, transparency and integrity.
The grantor can also be the trustee in specific arrangements, such as revocable living trusts. This setup can give the grantor complete control over their assets while they have the capacity to make significant decisions concerning their estate. When they can no longer do so, the successor trustee can take over.
It is a typical role in revocable living trusts. The grantor can appoint someone to this position if their trust needs someone to take over if they foresee scenarios where the initially assigned trustee cannot perform their duties. The successor trustee can assume the authority and responsibilities if the original trustee passes on or becomes incapacitated.
If the grantor is also the trustee, this position can be essential. It can also exist for other trust types, such as irrevocable trusts. The need for this role can depend significantly on the trust’s features and circumstances.
Appointing a successor trustee based on necessity
Successor trustees usually exist in trust arrangements where the grantor is also the trustee, warranting another party to take charge as needed. Other times, a successor can be beneficial regardless of the trust type, specifically if there are factors that could impact the trustee’s ability to perform their duties.
Before making any trustee designations, it is best to evaluate the trust’s requirements first. Thorough assessment and planning can help determine what roles and legal safeguards can be helpful to address issues or unique circumstances.