A living trust is a legal document that enables you to transfer property at your death without sending it through probate. If you create a living trust, you generally name yourself as the trustee, the person who manages the trust property. You appoint the person or persons to succeed to this position in the document.
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How Living Trusts Work
A revocable living trust accomplishes the same end as a will, allowing you to pass your assets to your chosen beneficiaries at your death. But if you opt for a living trust instead of a will, the property placed in the trust avoids probate. You can create a trust by filling in a form called Declaration of Trust, available from your attorney or through reliable online legal service providers. You then fund the trust by transferring title to your property to the name of the trust. If you name yourself both as trustee and beneficiary, you can continue to manage the property and have full use of it during your life. At your death, the trust property passes to successor beneficiaries.
Successor Trustee Responsibilities
In your living trust document, you must name a successor trustee who will take over the management of the trust property when you die or become incapacitated. Selecting a successor trustee is an important decision since the person or persons chosen are charged with managing the assets, paying trust debts and distributing the property according to the trust instructions.
Selecting Successor Trustee
It is important to select a successor trustee or trustees in whom you have confidence, someone you trust to follow your directions and stay organized. The successor trustee should have the wherewithal to know when and how to bring in professional help, if necessary. You can select a family member or friend who is qualified to manage trust property. Alternatively, you can choose a financial institution or pay a professional to step into the role.
You may be tempted to name all of your adult children or your siblings as successor trustees to avoid hard feelings. While there is no legal limit on the number of successor trustees you can name, it is simply impractical to name more than one or two persons. Since trustees must agree on all decisions and sign off on all financial matters, multiple trustees can slow the trust administration to a crawl.