CHOOSING A SUCCESSOR TRUSTEE
The person or persons whom you appoint to handle your financial affairs
under authority of your Trust at your incompetence or death are called
“The Successor Trustee.” They are a key component of your
estate planning, therefore:
- Are they trust-worthy?
Yes, they are your child or your brother or your ???, but that doesn’t
automatically mean that they are willing to overcome their natural
human tendencies and act selflessly in carrying out your instructions.
Do you trust this person’s character without question after
considering the following?
- a) The influence of their spouse. A selfish, greedy spouse
can exert enormous pressure, i.e.,
“You deserve more than your brother! What did he ever do
for them?” “We/Our kids/I need ..., just borrow/take
what we need. You can always pay it back.”
- b) Their personal financial record. Have they shown themself
to be responsible in handling their own affairs? If so, they may
very well be the one to choose.
- c) See their face in your mind – will that person resist
the myriad of temptations that your vast estate will present?
- d) Are they easily swayed by emotion/sad stories? Your beneficiaries
may become very adept at finding ways to squeeze money from them
if you don’t choose a Trustee who fully understands their
authority to say “No!” and that their ultimate responsibility
is to you, even though you are deceased.
- Would a combination Successor Trustee be a better choice?
Co-Trustees, required to come to an agreement or compromise, can be
a valuable “checks-and-balances” mechanism. In blended
families where two spouses will have different beneficiaries, choosing
a Trustee from each side can preserve some level of family unity.
If you have numerous children and are concerned about conflicts after
you are gone, consider naming all of your children as co-Trustees,
with a “majority rules” requirement.
- What other authority are your giving this person?
Consider carefully whether you want to name the same person to be
the Guardian of your children and to be your Successor Trustee. It
may be better to separate these responsibilities and require the Guardian
to consult with the Trustee in order to spend funds.
- If your beneficiaries are your relatives (rather than a charity
/ non-profit / etc.), seriously consider discussing with them your
decisions regarding Successor Trustee so that they are aware that
what will happen after your death is according to your instructions.
Make your desires clear both in the documents and in your conversations
with all concerned parties.
Click
here for an example of what must be avoided at all costs (especially
beginning at page 11!)
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