November 21

Choosing a Successor Trustee

Cortes Law Firm Oklahoma City Estate Planning Attorney

Choosing a Successor Trustee that will follow your Estate Plan as directed.

Choosing a successor trustee is one of the most important decisions you can make. It's also one that many people put off until it's too late. In this video I'll share some tips to help you choose the right person for this job - someone who will take care of your estate in accordance with what you want, and not their own agenda.

Who should you pick as your successor trustee in your estate plan? Today, we're going to talk about one of the most important decisions that you need to make when you do your revocable living trust centered estate plan. And that is, who should be your successor trustee. If you're married...

Married couples usually make each other as the joint trustees to start off the trust, right? And then when one of them passes or becomes incapacitated, then the other one takes over from there.

The question that we're talking about today is who becomes a successor trustee if both of you are incapacitated or if one of you has passed away and the other one is no longer able to manage their estate.

Incapacitation Trustee

A successor trustee comes in in two situations, which is why I like revocable living trust centered estate plans, because the first situation that you use a successor trustee is if you are incapacitated.

That means you are no longer able to make decisions, financial decisions on your own. And so your successor trustee steps in your shoes as the trustee of your Revocable Trust and takes over your assets makes certain that bills are paid that your electricity has paid your water bill is paid, your insurance is paid and basically just takes care of all of your assets.

Now, why this is so important is because if you don't have that in place, then somebody probably one of your relatives is going to have to go to court and get a guardianship or a conservatorship over you. And that's expensive if you can make that decision ahead of time.

Then there is usually not any court intervention at all. The successor trustee usually just takes over by initiating the correct documents like a certificate of trust or affidavit of trust, showing that they are now the currently serving successor trustee of your estate, even though you're still alive.


Death Trustee

Then the second thing is probably what most people think about is and that's after you pass away. So after you pass away, there has to be somebody to administer your estate, and that could mean distributing your assets and closing everything down.

Or maybe if you have minor children, that means that they were will essentially be the trustee of your children's trusts until certain mile markers are completed. Like maybe when they're 21, they get a little bit of money. When they're 30, they get a little bit of money.

When they're 35, they get everything. It's your decision, remember, because in all of our other videos, we talk about that revocable living trusts centered estate plan is customized to exactly what you want to happen. It's very important whoever you pick as your successor trustee agrees to take that fiduciary role on.

In other words, they agreed to do everything that you want to happen in that trust document and to carry out your wishes exactly the way they are. And just like I talked about having a successor trustee, when you're incapacitated, your successor trustee when you pass away will help your estate avoid probate.

Probate is Expensive

Depending on what state you're in or guys, probate are running anywhere from about $3500 to about $7,000 on average right now. And that is, everything goes perfectly. If they don't, they're going to get expensive really, really quickly.

We have had probate in the last couple of years, and I've talked about them in other videos that have cost $18,000. Another one cost almost $23,000 and another one was just over $34000 for a probate because the heirs were fighting.

So it's very important for you to pick somebody as your successor trustee for incapacity and for death that that person you trust explicitly. And I always tell couples, especially couples with children, that you don't have to make all of your children have a role in your estate.

As a parent, you know better than anybody what the personalities are of your children. And if you have a child who's not good with money, then don't make them a successor trustee. That's not the role that they should be in.

They're going to get frustrated. They're going to fight with everybody, and they're going to make your estate plan become a disaster. Pick somebody who you trust implicitly. And it might not be your adult children. It might be a friend, it might be a lawyer, your CPA.

It might even be a professional trust company. The bottom line is you have to pick somebody that you trust implicitly that you know, is going to do exactly what you want to do because they have told you and you've talked to them, and they're going to follow your directions to the T in distributing your assets and taking

care of your loved ones, whether you're incapacitated or you have passed away. 

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