September 28

Estate Planning Successor Trustee

Cortes Law Firm Oklahoma City Estate Planning Attorney

Estate Planning Successor Trustee decisions should be someone you trust completely

Doing your estate plan and can't figure out who your trustee should be? Well, by the end of today's video, you might have a better idea of what to do.

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When you do your revocable living trust-centered estate plan, you really need to pick three trustees for the process, and they can all be the same people or they can be different people for each part of the process.

The first one is who is the original trustee? Now, if you come into our office and want a revocable living trust, then most likely, you are going to be the trustee of your own trust. Now, there are exceptions to this. For example, if somebody is elderly and they just don't want to control their assets anymore and they've turned it over to a son or daughter, then we may name the son or daughter or adviser to be their trustee of their trust. But in general, when we're creating a revocable living trust, the grantor, you, who is creating the trust will also be the trustee of the trust. That's the original trustee of the trust.

The second trustee you need to figure out is who's going to be your incapacity trustee. Now, this is a very important role because you are still alive. And that's why I always tell you that I prefer a revocable living trust-centered estate plan because it gives you so much protection during your lifetime. And that protection comes in the form of a successor trustee who takes care of you during your lifetime and all of your assets. Remember, I always tell you guys, we are entrepreneurs of our own lives. So if you were to become incapacitated, somebody needs to step in and take care of You Incorporated. And that is your successor trustee.

And the third trustee is, well, your death trustee. And this is the trustee who steps in once you have actually passed away and distributes and administers your trust according to the terms that you have left in place in your revocable living trust-centered estate plan. Who can be all these people and how do you choose who should be your trustee for each of these steps? Like I've already mentioned, almost 90, 95% of the time, you are the initial trustee of your trust.

You're creating it and so you're the trustee of your trust. But who becomes your incapacity trustee and your death trustee? Well, they can be the same person, and in many times, people do actually pick the same person for their incapacity trustee and your death trustee.

It just makes sense, right, to have the person who is actually controlling it during your lifetime also be the person who's going to administer it after you pass. It makes the death trustee much more aware of what all the assets are. But, sometimes family will pick somebody else because they just think that somebody else will take care of them better during their lifetime, and they know that somebody else will do a better job of distributing the assets after they've passed away.

So it's just up to you. Most of the time, your incapacity trustee and your death trustee will be the same person. Who do you pick for that role? Well, it really needs to be somebody that you trust implicitly to carry out your instructions.

A lot of people get tied up in the fact that they don't want to hurt the feelings of one of their kids or one of their other kids. Well, guys, honestly, don't . You need to pick the right person for the right job. And you've heard me say this in other videos, we all know our children better than anybody else. Some of them are really good with financial decisions, and some of them, well, they're just not. So if they're not, don't worry about their feelings. They're not the right person to be your trustee. Don't put them in charge of the money if they can't even handle their own money, right?

Now, that brings up another good point is that your kids may not even be the right person for the trustee position. You may want a third party. You might want a brother or a sister to be your successor trustee for incapacity and for death. And this can be important, especially if your children are very young.

You want somebody who you implicitly trust to be in charge of your kids' money if they're very young, right? Because you may actually have placed your children with somebody else, with another brother or sister, and then you might want the other brother or sister to actually be in charge of the money. It provides kind of a checks and balances.

But again, the person who is taking care of your kids, who you decided is the right person to take care of your kids, may not be the person who's very good with money. You see where I'm going? So you have to think of all the different scenarios and the personalities of the people that you're putting into these positions.

And you also need to think about how old they are. If your brother or sister is your successor trustee, that might be a great idea while you guys are in your thirties, forties, fifties and sixties. But as you get older, guess what? Your brother and sister are also getting older, and it might not make any sense anymore when you're in your late seventies or early eighties to have your brother or sister be your trustee. So at that point, you need to pick somebody else who you implicitly trust to carry out your directions on how you want everything handled if you were to become incapacitated or once you pass away. These are very important roles.

Who you pick as your trustee will determine how well your estate plan is executed. So I always tell people, put a lot of thought into who they're giving that power to.

I know I've thrown a lot at you today, so that's why we've prepared our free guide on estate planning. I'll put a link to it in the description below and in the comment section below that, so that you can download it and get started in the right direction. And to help you out even more, watch this video up here and this video up here.

If you enjoyed this video, then, guys, please smash that subscribe button, and click on the like button, and also click on that little bell so you'll get notified every time we post a new video. Have a great day and an awesome week. And as always, thanks for watching.


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