Taking care of your assets is really a complex process, and forming a trust is an excellent method to ensure your money will go where you intend it. Sadly the Successor Trustee Form is too often overlooked. It is absolutely vital to have a Successor when you pass away. Just as an executor of your will handles the dispensation of your personal property, this vital individual will handle matters for the trust. We’ll walk you through the shape and any other relevant paperwork to help you make sure someone is there to deal with matters when you can no longer do so yourself.
Choosing a Successor Trustee
Before you fill out a Successor Trustee Form, it’s necessary to determine who you will be handing this duty to once the original Trustee passes away. Often people choose a relative or trusted friend; however, there are more options. If you have a lawyer on retainer, it may be wise to elect them as your ST. The most important thing is to choose someone who will deal scrupulously with your money. After your death, the ST can move funds or even cancel the trust when they wish. While you are the Trustee, the ability remains with you, but your new ST will essentially inherit that position. When selecting a capable individual, it is wise to run a background check. Look for any questionable court cases or charges involving debts, failure to pay, theft, or other money matters. Deciding to hand control of a large amount of cash to anyone should be a well-considered and researched event. Especially when you are not handing the position to someone you know, this step is even more important. However, you should consider running such checks even if you feel you already know the future Trustee.
To Pay or otherwise to Pay
Your Successor Trustee can be a volunteer or perhaps a paid individual. Depending on the circumstances, you should decide which is most appropriate. For instance, when it is a spouse or child, you may not want or need to compensate them for their time. Meanwhile, when you choose a professional to handle the issue; instead, it seems sensible to pay them for the job they're doing on your behalf. Engaging a professional is hardly just like asking your best friend to take over if tips over to you. Ensure you check the applicable laws where you reside, as the compensation rates may vary from one state to the next. There’s no problem with being generous. Bear in mind that there may be upward limits towards the pay scale as well as minimums.
When Does a Successor Trustee Take Over
Naturally, if the person who handles the trust dies, then the Successor Trustee takes over. This ensures a smooth transition for the trust and helps make sure payees continue to receive what's theirs under the terms. However, there are other circumstances when your ST may assume duties. According to Law Insider, when a current Trustee is taken away or ceases acting on behalf of the trust in any vital manner a brand new successor can be appointed. This must be stated in writing and accepted through the elected ST. A notice must be given to the previous Trustee if applicable. The incumbent ST should deliver this on paper in such instances.
However, when a company does not provide an ST, it may fall towards the court to appoint a competent individual. Thus, if the current Trustee will not do the job, is found incompetent, quits, or retires, then a new Successor Trustee must be assigned. If you don’t designate someone acceptable, a court may do so for you once you cease to do the job. Regrettably, that means the court-appointee and not a person that you pick now has the power over the trust. To prevent the above scenario, it is vital to make sure you have already assigned a new Successor Trustee towards the position. That’s where this form becomes important. Once this is completed, it is much harder, though not possible, to change who is responsible for the trust.
Do You'll need a Successor Trustee
Not all trusts require a backup Trustee. The main difference is primarily important based on whether the trust is irrevocable or a revocable living trust. Irrevocable trusts tend to be more restrictive than their revocable counterparts. That said, each trust is uniquely written, which is important to read it and carefully determine the requirements. Regardless of necessity, it is wise to select and establish your ST when you create the trust or take over the position. While there are some circumstances where this might not be appropriate, it is more likely that you'll require a Successor. If you’re concerned about the issue, speak to a lawyer and have them look at the trust paperwork.
Paperwork for a Successor Trustee
It is not a lengthy tactic to create, fill out, or file a Successor Trustee Form. Many people prefer to use a prefabricated version a treadmill created by their lawyer. Fortunately, it's a simple document. You will need the address, phone number, and full legal name from the Successor. If they receive a stipend, then you should also include a social security number for tax purposes. You may need a notary public. Additionally, if you are a co-trustee or there are other grantors, you will need them present to sign as well. Since these individuals share responsibility for that Trust, they must approve the brand new ST as well. A Successor Trustee Form is merely an amendment to the trust. Doing this allows the new (future) ST to become added without drawing up an entirely new trust. Hence, the amendment gets put into the end of the original document.
You must sign the amendment before a notary public for it to be valid. The amendment needs a date and statement at the very top that clearly indicates that the amendment exists to mention an ST. The form should explain exactly who will take over upon the death or incapacity of the present trustee(s) with the information you collected, such as their name and address mentioned above. If you plan to pay the new Successor, this should be noted. Furthermore, the form should include a statement that says the amendment supersedes any similar information noted within the original trust document. Finally, you will have to attach this to the original. Copies of the amended trust should go to any or all banks and brokerages that handle the assets. You may even wish to file this document by having an attorney if the trust has a dedicated individual or firm. Once this really is complete, you’ve appointed the Successor Trustee.
Choosing anyone to handle you, or your companies’ money should never be done carelessly. A Successor Trustee is in a position of extreme trust, plus they should always be both willing and capable to handle the task with the utmost professionalism. While the paperwork is straightforward, the election process is essential to the future security from the trust.