When you created your trust, you did a lot of thinking and figuring and finally named someone to be your successor trustee in case anything happens to you. But, as your life moves along, the choices you made when you created your trust may have to be changed. Your trust can easily be amended and changed. One of the more common changes people want to make in their trust is a change in successor trustees. The individuals you choose as successor trustees may die, move, change their values, or have any one of a dozen issues that would make you want to name new successor trustees.
What next? When you set up a trust, it is advisable to have an ordered list of people who you want to act as your successor trustee. The successor trustee will take over when you die or become incompetent and can’t act as trustee for your trust. If your first choice for successor trustee won’t work out for some reason, then your second choice would act. I usually have clients name three or four choices. There are lots of considerations you should take into account when you name successor trustees. I go through some of the considerations in my YouTube video below.
Your top choice should be listed first, followed by others who can step in if your first choice can’t perform the trustee duties. If you have multiple children, it is generally a good idea to include all of them on the list, if only to avoid hurt feelings.
Names lower down on the list have a pretty low chance of serving. You can name anyone as a successor trustee. Naming your lawyer isn’t a good idea, because it creates a conflict of interest. You could name a bank, though the lawyers and banks will charge relatively high fees. In rare cases, having an independent party, even with a fee, many be preferable in order to avoid family conflict.
It is possible to name two or more trustees to act jointly if needed, but realize that the more people there are who have to be involved to decide on a course of action, the more difficulties there will be in managing the trust effectively. If you do want two trustees, then you can still name a list and have the first two act as joint trustees.
It is a good idea to review and update your estate planning documents at least once every decade. As circumstances change, you may realize you need to change the order of your trustees in the list. This can be done with a simple amendment to your trust.
Learn more about how to set up your entire estate plan in my book Protecting Your Financial Future.