If there is a co-trustee they usually continue to manage a trust once a trustee dies, but if there is no co-trustee a successor trustee takes over
You should appoint a successor trustee whether you have a revocable or irrevocable trust
Failing to name a successor trustee means the court may have to get involved, which delays trust administration
The trustee is the person or entity responsible for managing the assets in a trust, and if they die a co-trustee or successor trustee will take over their responsibilities. If the grantor (the person who created the trust, also known as the trustor) was also the trustee, upon their death the trust assets may pass to beneficiaries, depending on the terms of the trust document.
Trusts are an important estate planning measure that allow your beneficiaries to receive money, assets, and other high value property outside of the probate process. However, the court may become involved if the trustee dies and no one has been named to take over this role, which can delay how long it takes for assets to be distributed. You should make sure to name at least one successor trustee in your trust document or leave instructions as to how a successor trustee should be chosen, so that there is a smooth transition once the trustee — whether yourself or someone else — dies. You can also try to amend your trust if your chosen successor trustee predeceases you.
When the trustee dies, someone else must take over since a trust can't operate without a trustee.
If there was a co-trustee , like with a joint trust, the surviving co-trustee typically becomes the sole trustee (unless the grantor specified different terms in the trust agreement). They will continue to manage the trust per usual according to the grantor’s instruction, and when they die a successor trustee will take over.
If the grantor was the trustee of their revocable trust, a successor trustee takes over the trustee’s duties. It’s common for the trustor to fulfill both roles with a revocable living trust, which becomes irrevocable once they pass away. (Learn more about a trustor vs trustee.)
If the grantor was not the trustee, the successor trustee takes over the trustee’s duties. Someone other than the grantor typically serves as the trustee of an irrevocable trust, which can’t be easily dissolved, but does have additional benefits like reducing estate taxes.
Create your will today.
With Policygenius, you can create a tailored will using attorney-approved tools, without the attorney price tag.
If the grantor didn’t outline who should be the successor trustee, then the probate court will appoint someone. A trust beneficiary or the grantor's family can petition the court to suggest someone. The trustee is a key part of the trust, so make sure you name one. If you elect to create trust through your will, called a testamentary trust, make sure to include a successor trustee in the will.
Learn more about how to set up a trust.
The successor trustee carries out the same responsibilities as the trustee, as outlined in the grantor’s trust document. They must:
Maintain trust property
Distribute trust assets to beneficiaries once the terms of the trust have been met
See also: Can a trustee sell trust property?
Some trusts, like a trust fund, are set up to last beyond the grantor's lifetime. The trust can provide a surviving spouse with income and give children the remaining assets. A family trust or dynasty trust like this can be structured to last decades.
Other trusts, however, may simply pay out after the grantors' death. If the grantor sets up a revocable trust solely to pass on an inheritance, then the trust may close after the terms of the trust have been fulfilled and all assets have been distributed to beneficiaries.
You can open a revocable living trust with Policygenius as part of your estate plan.
Recession-proof your money. Get the free ebook.
Get the all-new ebook from Easy Money by Policygenius: 50 money moves to make in a recession.
Was this article helpful?