What is a successor trustee?

Successor trustees serve as backup trustees and will take over the duties of managing the trust if the prior trustee is unable or unwilling to carry out their duties.

Derek Silva

Derek Silva

Published September 11, 2020

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KEY TAKEAWAYS

  • Your successor trustee takes over if the initial trustee is unavailable or unwilling to serve as trustee

  • You can choose just about anyone as successor trustee, but you should notify them of your choice before creating the trust

  • Also consider an alternate successor trustee to take over if the successor is unavailable

A trust is an estate planning tool that someone may use to help them pass on their money, property, and other possessions after they die, without having to go through probate. Each trust needs a trustee — a person, firm, or organization to manage the trust and oversee the disbursement of assets at the appropriate time. Should something happen to the original trustee chosen in the trust’s founding documents, a successor trustee who was named will take over the trustee’s responsibilities.

A successor trustee is a backup for the trustee. If something happens to the trustee or if the trustee doesn’t wish to serve as trustee, all the responsibilities of their role will fall to the successor trustee. It’s possible to create a trust without naming a successor trustee, but it’s best to name someone. If the trustee dies and you didn’t name anyone as successor to the trustee, a court will need to decide who should assume the role.

Refresher: What does a trustee do?

When someone creates a trust, they must name a trustee. The trustee serves as the custodian for the trust, managing all the money, investments, and other assets in it. They have a fiduciary duty to act in the trust’s best interests. Trustees also have other duties related to trust administration, like filing an income tax return for the trust if necessary, managing property in the trust, and disbursing assets from the trust to the proper beneficiaries when necessary. (Remember that trust assets do not go through probate, so you may need a trustee in addition to an executor for your will.)

Just about anyone can serve as trustee. Many people who create a revocable living trust will name themselves as the trustee, but you can also choose a beneficiary, a lawyer, or a corporate trustee. Naming multiple people to serve as co-trustees is also possible.

Read more about the responsibilities of a trustee.

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Do you need a successor trustee?

It’s always a good idea to name a successor trustee, even if you can create a trust without naming one. The biggest reason to name a successor is that life is unpredictable and something could always happen to your primary trustee. Even if the trustee is alive and in good health, other life circumstances may make it too difficult or time consuming for them to adequately carry out their duties. For that same reason, you may also want to name an alternate successor trustee — someone who can take over should your successor trustee be unable or unwilling to do the job.

If you have a revocable living trust and are serving as the trustee, make sure to name a successor who can take over the role after you die or if you become incapacitated. When using a trust to pass on assets after your death, it’s your successor trustee who will take over after you die and oversee the distribution of assets to beneficiaries. Trust assets also aren’t affected by power of attorney documents in most cases, so your successor trustee would take over for you in the case of incapacity — a time when you’re physically or mentally unable to serve as trustee.

When creating an irrevocable trust, naming a successor trustee (or multiple) in the original trust agreement is especially important because you most likely cannot change the terms of the trust after it has been created.

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What happens if there is no successor trustee?

All trusts need someone to serve as trustee. If a trust does not have a trustee at any point — regardless of the reason why there is no trustee — then someone will need to go to a court for a judge to choose a trustee. All circumstances are different, but if the trust creator (called the grantor, trustor, or settlor) is unavailable then it’s probably a beneficiary who will have to bring the trust to a court. If there is already someone serving as executor for the grantor’s estate, that person may also be considered for the trustee position (though handling probate and a trust will be too much for one person in some cases).

Can you change your successor trustee?

Depending on the details of your trust, you may be able to modify its terms, including changing your successor trustee nomination. Revocable trusts can generally be modified while irrevocable trusts cannot, but it’s best to speak with an estate lawyer to better understand your specific situation.

Related article: Your guide to the different types of trusts

Who should be your successor trustee?

The same rules as choosing a trustee apply to choosing a successor trustee. In general, most people can serve as your trustee — family, friends, beneficiaries of the trust, lawyers, corporate trustees, or organizations. You can choose a single trustee or you can choose multiple people to serve as co-trustees. In the case of a joint trust, your spouse is likely named as your successor, but you may also want to choose someone to succeed them.

Always choose someone who you believe can fully carry out the duties of trustee, even though they may never actually have to do anything if the original trustee is available. You should also choose someone who you trust to do well and honor your wishes. (The instructions in a well-made trust document should already reflect your wishes, but choosing someone who knows your personal wishes may still be preferable.)

If you are using a trust to bequeath assets to your heirs after your death, you may also want your trustees to understand how the rest of your estate is being managed, including whether you have a last will and testament and who is serving as executor of your will.

Regardless of who you choose as successor trustee, you should notify them before you actually create the trust. Serving as a trustee can be a lot of work so it’s important that everyone understands what the job entails and is comfortable doing the job. A trustee is always allowed to refuse the role if they don't want to do it.

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About the author

Personal Finance Expert

Derek Silva

Personal Finance Expert

Derek is a tax expert at Policygenius in New York City. He has written about multiple personal finance topics in the past, and his work has been covered by Yahoo Finance, MSN, Business Insider and CNBC.

Policygenius’ editorial content is not written by an insurance agent. It’s intended for informational purposes and should not be considered legal or financial advice. Consult a professional to learn what financial products are right for you.

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