Are you prepared to name a successor trustee in your estate plan? Don’t worry if you’re unsure—this episode of Absolute Trust Talk will guide you through the process. We’ll break down the most important traits to look for in a successor trustee, such as trustworthiness, reliability, and the ability to seek professional advice when needed. Plus, we’ll share common pitfalls to avoid so you can make the best choice for your family’s future.
Time-stamped Show Notes:
0:00 Introduction
0:50 What is a Successor Trustee, and why is naming one essential for your estate plan?
1:37 Trustworthiness is a critical quality when naming a successor trustee. Learn why it’s so important.
2:30 The next trait to consider in a successor trustee is often underestimated.
3:05 Does your successor trustee need to live nearby? The answer might surprise you.
4:20 We’ve covered the must-have qualities, but here’s a major red flag to avoid: Ego.
Transcript:
Hello and welcome to Absolute Trust Talk. This is our video podcast here at Absolute Trust Counsel. I’m Kirsten Howe, and Jessica Colbert is with me today. We are going to be talking about choosing a successor trustee — who should be the successor trustee of your trust? This is a question that we get quite often from our clients when we’re helping them with estate planning, and it’s a very important question. Getting it right can have a big impact on the family, especially future family relationships, and we’ll talk about that in a bit.
Today, we’ll discuss the qualities to consider and look for when selecting a successor trustee. Jessica, just to make sure everybody understands what we’re talking about, what do we mean when we use the phrase “successor trustee”?
We’re talking about a regular, revocable living trust. This is the most common type of trust. If you’ve done estate planning in California, this is most likely the type of trust that you have. You set it up, and you are the trustee. You handle your assets, decide what’s done with them, and decide how to invest. But if something happens to you, someone needs to step in, follow your instructions, and handle your assets, and that is the successor trustee.
Okay, great. This could happen – that someone has to step in – in two situations: you could die, or you could become incapacitated. So that’s when we need a successor trustee.
Now, let’s discuss some of the qualities or factors we want to consider when deciding who to name as our successor trustee. Jessica, I’ll let you start.
An obvious one is trustworthiness. This is someone you trust to follow your instructions and handle your assets for you. Right, that’s why we call them a trustee. It’s right there in the name.
One of the more important ones after that is reliability. By that, I’m focusing on someone who follows through and does what they are committed to doing. They’re not going to procrastinate. They’re not going to do a sloppy job. They’re going actually to do what they committed to doing.
Another one is availability and bandwidth to take on this job. It does take a lot of work, and someone who is already juggling raising young kids while also having a super demanding job might just not have the bandwidth to take it on.
Yeah, this is a really important one. People don’t realize how much work this job can be until they get elbow-deep in it. It’s very important to bear that in mind. Maybe you’re thinking about naming a child. Take a look at what that child’s life is already like.
Another question we have people ask is, “Does it matter where my trustee lives? Does the geography matter?” I would say it’s not critical. We have a lot of successor trustees we work with who don’t live in California. The job can be done remotely. In the case of incapacity, it might be better if the trustee was geographically desirable, but that’s not a critical aspect. Do you, Jessica?
No, the job can be done, for the most part, remotely.
Okay, but what would you say about legal or financial experience? Sometimes, we have that conversation with clients, like, “This one child has a lot of financial experience; this other one has none, so I’m picking the first one.”
Yeah, having that kind of experience can be a plus, but it’s not required at all. Your successor trustee can and should consult with professionals such as an attorney, a CPA, or a financial advisor if needed. They don’t need to personally have that experience because they can and should consult with people to help them with that.
Right, which brings me to one final quality that’s a little more nuanced. You want to look for someone who’s not all caught up in their ego or status. In other words, who has the ability to recognize when they don’t know everything and need to rely on someone for some help, like talking to an attorney? Don’t assume you know everything and that you’ll do it correctly because a mistake can be costly for the whole family.
Alright, I hope you got a lot out of that. We’ll continue this conversation in our next episode. We look forward to connecting with you again.
Resources Related to This Episode:
- Absolute Trust Talk Episode 121: What Happens When a Trustee, Executor, or Beneficiary Dies? https://absolutetrustcounsel.com/121-what-happens-when-a-trustee-executor-or-beneficiary-dies/
- Absolute Trust Talk Episode 146: Trustee and Executor Responsibilities: Best Practices and Pitfalls Part 3 https://absolutetrustcounsel.com/146-trustee-and-executor-responsibilities-best-practices-and-pitfalls-part-3/
- Absolute Trust Talk Episode 145: Trustee and Executor Responsibilities: Best Practices and Pitfalls Part 2 https://absolutetrustcounsel.com/145-trustee-and-executor-responsibilities-best-practices-and-pitfalls-part-2/
- Absolute Trust Talk Episode 144: Navigating Trustee and Executor Responsibilities: Best Practices and Pitfalls https://absolutetrustcounsel.com/144-navigating-trustee-and-executor-responsibilities-best-practices-and-pitfalls/
- A Will is Not Enough – Securing Your Legacy with Estate Planning Life can change in an instant. A will is not enough to be prepared. Get free access to our actionable E-book Guidebook #1 and start protecting your legacy today. https://absolutetrustcounsel.com/guidebooks/
- Learn how to comfortably define gray areas and assess your own unique needs to effortlessly build a secure future now. Check out Guidebook #2, Estate Planning Beyond the Basics, here > https://absolutetrustcounsel.com/guidebooks/
- Get our free introductory guide to the most used estate planning tool, family trusts, and understand how we plan to help protect your family. Guidebook #3: https://absolutetrustcounsel.com/guidebooks/
- Absolute Trust Counsel would love to offer access to our Incapacity Planning resource page: https://AbsoluteTrustCounsel.com/Incapacity-Planning/. We’ve collected our top planning information all in one place so listeners can find videos, guidebooks, blog posts, and a host of information with tips and strategies on implementing, planning, and protecting themselves and their loved ones.
- We’re pleased to provide a library of e-books to address common estate planning questions and concerns in practical, easy-to-understand language. https://AbsoluteTrustCounsel.com/Resources/.
- ASK KIRSTEN: If you’d like Kirsten to answer your question on the air, please email her at Info@AbsoluteTrustCounsel.com.
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