By Libby Banks, The Law Office of Libby Banks, PLLC

For many clients who have trusts, a big concern is the smooth transition to a successor trustee. There are ways to ease that transition.

Consider Carefully What A Successor Needs To Take Over as Your Trustee: A successor trustee may need to step in during your lifetime, should you become incapacitated. One way to streamline the process is to simplify how your successor trustee can start assisting you. Requiring just one physician’s opinion that you are incapacitated will mean a quicker transition than requiring multiple physicians or more elaborate proof that you cannot handle your finances.

Add Your Successor as a Co-Trustee: For clients who might soon need a successor trustee to take over, appointing their successor as a co-trustee is a good option. The successor can then be added to accounts in the trust and authorized to assist with financial management. This gives your successor trustee the opportunity to learn how you want your finances to be managed while you are still able to guide them.

Don’t Add Your Successor to An Account Not in Your Trust: Your co-trustee has fiduciary duties to handle your financial affairs properly and for your benefit. That’s why I caution against putting the person on as a co-owner of any account that you have not transferred to your trust. As a co-owner, they have full rights to the money in the account — and so do any of their creditors. Having that person as a co-trustee instead gives you protections you shouldn’t give up.
Educate Your Trustee on Their Duties and Responsibilities: When the time comes for a successor trustee to take over, our office will work with successor trustees to guide them through the process. We also provide advance education through our Legacy Care Program, which offers a meeting that provides your successor trustees an opportunity to learn about their duties. For information on the program, visit our website at libbybanks.com/legacy-care-program/

Make Sure Your Trustee Knows Where to Go and What To Do When it is Time to Step In: It might seem obvious, but be sure your Trustee knows where to find your trust documents, who your trust attorney is, and where you maintain your accounts. Be sure they can easily find financial information they may need. We offer a digital legacy vault to secure these items with military grade security. Find out more here: libbybanks.com/digital-legacy-vault/

Be Sure Your Trust Is Funded: The first and last item to ensure a smooth transition is to make sure that your accounts and other assets are titled to the trust. This helps your successor Trustee to step in with full access to everything they may need. We recommend that virtually all assets be transferred to the trust. The exceptions are any IRA, 401(k), or similar retirement accounts, which must be in your name, and vehicles.

If you have questions about your successor trustee stepping in, or if you are interested in creating or updating a trust plan, give us a call at 602-375-6752 or visit our website at libbybanks.com.