Living Trust: When Naming a Successor Trustee, Plan to Also Identify a Backup

Happily, this is the time of year when many people follow through on their New Year’s resolutions and come in to our offices to prepare Living Trusts. In a Living Trust you identify those to whom you want to leave your property as well as a “Successor Trustee”–the person who will carry out your wishes, much like the Executor of a will. This is an important decision; it can require a significant amount of time and concentration to manage someone else’s affairs.

People live long, productive lives and may outlive their Successor Trustee

Many people name one of their children as Successor Trustee, but something they may not think about is how important it is to also name a backup, or alternate Successor Trustee. It’s not unusual for people these days to live healthy, productive lives into their 80s and 90s, which means they may outlive their grown children. If a 72-year old son or daughter is the Successor Trustee, that son or daughter could die or become incapacitated before his/her parents. If there’s a backup, that person will become the Successor Trustee. If no backup has been identified, the court may consider other family members or third party, such as an attorney, fiduciary or organization that handles estates professionally, or even your bank. This, of course, means incurring additional costs.

In a recent case, a single Pleasant Hill woman came into our Walnut Creek office to create a Living Trust. She owns her home and has one adult son who, along with a niece and nephew, would be her beneficiaries.

As she began working through our step-by-step, attorney-approved workbook, she identified her son as the Successor Trustee of her Living Trust. As we discussed this, we asked her what would happen if she were 87 and still in robust health and her son were incapacitated. She immediately realized that just naming her son Successor Trustee was short-sighted and that she needed to take the extra step of naming her niece or nephew, both significantly younger, responsible and capable, as backup Living Trust Successor Trustees.

Is creating a Living Trust one of your 2015 Resolutions?

We encourage you to come in to one of our California Document Preparers offices to get started. We help make this easy for you. Be thinking about who, among your family members, should be the Successor Trustee—and just as important–the backup Successor Trustee.