Successor Trustee and Trust Administration

Dear Len & Rosie,

Like so many others, I too have a living trust. I have a question, but the lawyer who assisted me with my trust is no longer available for consultation. Can you explain the procedure for my family to put the living trust into effect when the time comes? I am widowed, therefore one of my sons will act on my behalf.

Could you give us "do-this-first" type of information? I know each situation will differ somewhat, but surely there are some basics that apply to everyone.

Edna

Dear Edna,

Many people think that when a person with a trust dies, there is nothing that to be done because the trust takes care of itself. Lawyers call this "The Living Trust Myth". In reality, there is work to be done, sometimes plenty of work.

If you want your son to take care things when you die, he should be named as the successor trustee of your revocable trust. Let him know where you keep the trust documents so he can find them without difficulty after your death. He should also know about your accounts, your life insurance policies, and your other assets so it will be easier for him to pick up the pieces after your death. You may even want to give him a copy of your trust.

Give your son this newspaper column, so he has some idea of what to do. He may want to do all of the work himself. Despite this, he should at least review the trust with an attorney after your death. As trustee he will owe your beneficiaries the same duties an executor owes the heirs of a probate estate, including providing a full accounting of the trust. If he makes a mistake causing a loss to the beneficiaries, he could be held personally liable.

For this reason, your son should not simply start writing checks to your beneficiaries after your death. Instead, he should sit down and read your trust. Then, he should book an appointment with an elder law attorney experienced in trust administration. There are things a trustee has to do that are not readily apparent from reading the trust. Taxes may have to be paid and deeds distributing property may have to be precisely drafted in language a non-lawyer may not be familiar with. There are many other small details that will have to be attended to.

Your son should collect all of your recent account statements, and obtain copies of the deeds to your house and to any other real property that you own. He should also keep track of your burial expenses, and everything he spends on behalf of the trust.

When he is ready, your son should pick up three or four copies of your death certificate and meet with his attorney, who can advise him about your taxes, help him retitle the trust assets into his name as successor trustee, and get the job done right.

Len & Rosie