WHO SHOULD YOU NAME AS SUCCESSOR TRUSTEE OF YOUR REVOCABLE TRUST?

You may appoint a successor trustee to administer your revocable trust upon your resignation as trustee, or upon your incapacity or death. You may appoint a family member, a friend, an attorney experienced in trust administration, another advisor such as an investment professional or an accountant, or a corporate fiduciary such as a bank trust department. The successor trustee is a fiduciary, which means that the trustee owes beneficiaries and creditors a high standard of care.

Our firm provides fiduciary services as successor trustee. We are experienced in these services and we have developed procedures to assure that legal requirements are met in the administration of trusts. An attorney and a paralegal in our firm work together to be sure that all duties are performed timely and according to the trust agreement.

An experienced attorney has the knowledge and resources to serve as successor trustee which may not be available to other persons. The following will explain why.

The successor trustee must assure that a tax identification number is assigned to the trust if the trust has become irrevocable because of your incapacity or death. The successor trustee must collect all assets titled in the trust, confirm that they are insured in the name of the trust, and identify all creditors, including utilities, credit cards, mortgagees and unsecured creditors.

When a revocable trust becomes irrevocable because of the settlor’s incapacity or death, the successor trustee is required by the Arkansas Trust Code to send a notice to each beneficiary. The successor trustee may send beneficiaries a plan for distribution of the trust estate, and if so, the beneficiaries will have a limited time within which to object to the proposed plan. The successor trustee may also notify beneficiaries that they have a limited period of time within which to contest the validity of the trust.

The successor trustee must confirm that all creditors have been paid and may commence a probate proceeding for the purpose of noticing creditors and barring any claims that are not filed in the probate proceeding. This is not required by law but may be advisable to assure that property distributed to beneficiaries is not subject to the claims of creditors.

The successor trustee must consult a qualified tax professional such as a certified public accountant to determine whether tax returns are required for a deceased or incapacitated settlor, or for the trust. If taxes are owing, the successor trustee must pay them from the trust estate.

Finally, the successor trustee must distribute the trust estate to the beneficiaries as directed in the trust agreement.