Is There a Pilot on Board?

Carefully Consider Your Successor Trustee to Prevent Turbulence for Your Trust and Beneficiaries

Isn’t it exciting that you could wake up tomorrow and catch a flight to Los Angeles and be back in time for dinner? If things are operating smoothly, you as the passenger won’t see the effort it takes to get you there and back. You are in the good hands of the captain, and if the captain should fall ill, the trusty co-pilot is there to step in and get you to your destination safely. All of this occurs with you being none the wiser that any issue has occurred. Now imagine there is no co-pilot and the flight attendant comes over the intercom asking, “Is there anyone on board who knows how to fly a plane?” If I’m on that plane, I surely hope a trained pilot raises their hand instead of the taxidermist in seat 32B.

When you establish a revocable trust, you take your seat in the captain’s chair as trustee, but have you given any thought to who your trust has appointed as your co-pilot? When a trustee dies or becomes incapacitated, it becomes the successor trustee’s turn to take a seat in the captain’s chair with all of the same powers and responsibilities that the original trustee had upon the trust’s establishment. This includes gathering and protecting the trust assets, paying creditors and expenses, valuing and appraising assets, filing taxes, and ensuring the beneficiaries are provided for consistent with the plan and goals outlined in the trust.

In a recent conversation with a new client, I was informed that the couple’s estate plan, like many estate plans, named one of their siblings as the successor trustee. The couple went on to tell me how overwhelmed the sibling felt with the knowledge that she would eventually step into the trustee role. “Do I have to go to court?” “How do I know who gets what?” “What if someone disagrees with the trust?” And of course, “What in the heck do I do about taxes?” Ultimately, the sibling felt too burdened with the responsibility she had been given. TCO answers these questions every day, and we were happy to step in for this couple to serve as their successor trustee.

One difference between a bona fide aviator stepping in as co-pilot and the successor trustee you name in your trust document is that you have the ability to name as many backup trustees as you wish. If you do choose to name a loved one to serve as your successor trustee, it is always recommended to name contingent successor trustees in the event this person cannot serve or does not want to serve as your trustee. Back to our example with the sibling as trustee: Had this couple already named TCO as contingent successor trustee, then if their sibling felt overwhelmed she could simply resign from her position, allowing TCO to step in as trustee. Taking care to plan for these possibilities in advance can save you and your loved ones a lot of unnecessary work and stress.

Choosing a successor trustee with the necessary skills to step into the captain’s chair should be the priority for any pilot who wants to ensure his/her passengers reach their destination. Whether you choose an individual or a corporate successor trustee, you want to choose someone you can trust to take the time during your life to learn how you want your specific trust to operate. This way they can ensure the passengers (your assets) arrive safely to their rightful destination (your beneficiaries). When naming your successor trustees, you should also select individuals you have the confidence in to accomplish the goals set out in your estate plan. At the very least they should know where to look when questions arise.

You would never trust a co-pilot who couldn’t land the plane safely, so don’t appoint a successor trustee who doesn’t have the skills necessary to administer your trust consistently with the plan you laid out for your assets. If you aren’t sure who your successor trustee is or if you want to look into contingency planning if your successor trustee cannot take on this responsibility, contact us to ensure your assets arrive at their intended destination.

Assistant Vice President

(918) 744-0553