What Are the Duties of a Successor Trustee for Administrating a Living Trust?

By Stephanie Kurose, J.D.

What Are the Duties of a Successor Trustee for Administrating a Living Trust?

By Stephanie Kurose, J.D.

A successor trustee's duties depend on the type of living trust they are tasked to administer. A revocable living will, for example, calls on this individual to take a more active role than an irrevocable one. In both cases, this specific agent has a fidiciary duty to carry out the wishes of the living will's grantor and can be held personally liable for breaching such duties.

Pen resting on document that says "living trust and estate planning"

Types of Living Trusts

A living trust is a valuable estate-planning tool that allows the trust creator, or grantor, to transfer almost any type of asset into the trust. A trustee, or agent, then manages the trust for the beneficiaries.

The agent's duties depend on the specific type of living trust they are responsible for managing. The two types of living trusts are revocable and irrevocable. A grantor can modify or terminate a revocable trust at any point before they die. The grantor can add or remove beneficiaries and assets, or designate a new agent to oversee the trust. Typically, the grantor is the trustee of a revocable trust and designates a successor to take over once they die.

By contrast, modifying or terminating an irrevocable trust requires the consent of all designated beneficiaries. The grantor cannot be the agent of an irrevocable trust. However, they can still designate both a trustee and a successor to manage the trust.

Role of a Successor Trustee

As stated above, the type of trust dictates the specific responsibilities of a successor trustee. Here's a closer look at the revocable and irrevocable living trust and the agent's role in each one.

Revocable Living Trust

Because the grantor and trustee are typically the same person for a revocable trust, the successor does not take on any responsibility until the grantor becomes incapacitated or dies. The trust agreement should explicitly state the role of the successor in each of these situations. For instance, they may be required to act only upon the death of the grantor and not merely when the grantor becomes incapacitated. Alternatively, the trust agreement may require that they act as soon as the grantor becomes incapacitated. The trust agreement should have criteria to determine what circumstances constitute incapacity, such as requiring a doctor to confirm that the grantor can no longer manage their own affairs.

Once the trust requires the successor trustee to act, they assume the same role as the original agent. This includes communicating with all of the beneficiaries, managing the trust according to fiduciary duties, and distributing the trust's assets according to the terms of the trust agreement.

Irrevocable Living Trust

Because the grantor must designate someone else as trustee of an irrevocable living trust, the successor (if any) would not be required to act unless the original agent could no longer perform their duties. In that case, the successor would assume the same duties that the original agent performed at the time they began overseeing the trust.

Because the role of a trustee carries with it such a huge responsibility, it is important that the successor fully understands the duties required of them, especially with regard to revocable trusts, which require more activity than an irrevocable one.

In general terms, a successor trustee manages a living trust either because the grantor dies or becomes incapacitated or because the original agent dies, becomes incapacitated, or is no longer able to manage the trust for some other reason. It is an important role that carries with it a fidiciary obligation to make sure the grantor's wishes are met. Failure to do so could lead to legal ramifications for the successor trustee.

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