Setting up a revocable living trust with your Orange County estate planning attorney is an excellent way to avoid probate and reduce the financial strain on friends and family.
The process involves naming one or more people, or sometimes a corporate trustee, to act on the settlor's (also known as the grantor or creator) behalf upon incapacitation or death. The person bearing this responsibility is called the successor trustee.
The successor trustee, as the name implies, "succeeds" the trustee, usually the person who creates the trust, following their incapacity or death. In essence, they assume responsibility for managing the trust and its assets when the creator can no longer manage the trust themself.
The duties of a successor trustee vary, depending on many factors, and are usually detailed in the trust document. Some of these duties include instructions for what to do if the creator has become mentally or physcially incapacitated or has passed away, and what to do if they have minor children. Let's take a look at what these different scenarios mean.
After agreeing to the role of a successor trustee, you should become familiar with the trust and the conditions stated within it. Find out where the trust is kept, along with any insurance documents. Go over the beneficiaries with the grantor to ensure they contain the appropriate designations. It's also a good idea to have an estate planning attorney in Orange County review the trust and corresponding documents on an annual basis, or when there has been a change in the family or assets.
In addition, determine if you are the sole successor trustee or if you will be acting with someone else.
If prepared correctly, the trust should contain instructions for how to determine whether the grantor is no longer capable of handling their financial affairs. Usually, one or more doctors are required to certify that, due to physical or mental disabilities, the grantor is incapacitated and can no longer handle their financial affairs. This document may be requested by banks and other institutions.
Once legally determined, a successor trustee's role is as follows:
The successor trustee's responsibilities include distributing assets and property held in the trust and transferring titles according to the trust agreement. The role changes dramatically if minor children are involved, or if the trust is going to exist for a number of years after the death of the creator.
If there are children or individuals that will not receive their inheritance until after they reach a certain age or fulfill a specific agreement, the trustee must protect the inheritance, and assets, until the time they can be distributed to the beneficiaries.
The responsibilities assumed once the grantor passes away are as follows:
If money is needed to pay off tax liabilities or debts, the trustee may need to sell some existing assets. Be sure to consult with the estate planning attorney in Orange County before placing any assets up for sale.
As is evident from this list, the responsibilities of a trustee are numerous and can last for years. If you feel overwhelmed as a trustee, you can hand over the duties to a successor trustee, if one has been named. If there is no successor trustee, contact the estate planning attorney Orange County CA to determine alternative solutions.
At Parker Law Offices, we understand the importance of a well prepared estate plan and are dedicated to preparing the appropriate documents required to keep a family's assets out of probate and up to date with current laws.
We are committed to making this already trying time a little easier. Call us today for a complimentary consultation.