A successor trustee is named in a living trust as the person who will take over the trustee’s duties and fulfill provisions of the trust when the trustee dies. The transition process requires trust property to be transferred out of the trustee's name into the successor trustee's name. To do this, the successor trustee must review the trust document and prepare the necessary transfer documents for each type of property held in the trust.
A living trust is created by a document called a trust agreement or declaration of trust. This document is sometimes called a revocable trust or inter vivos trust. The person creating the trust document is called the settlor or trustor and is invariably named as the trustee. The trust document includes important information such as the name of the successor trustee; type of property included in the trust; duties of the successor trustee; name of trust beneficiaries; and how trust property is to be distributed to the trust beneficiaries when the settlor dies. The first step for any successor trustee is to locate the trust document and review its provisions for all of the foregoing information.
Read More: Is a Living Trust Considered a Public Document?
Real Property Transfers
Real property is commonly included in a living trust, such as the family residence, and must be transferred when the settlor passes away. For example, real property held in the trust is titled in the trustee's name as "John Smith, Trustee of the Smith Family Trust dated 2/1/2006." To transfer property to the name of the successor trustee, a form called "Affidavit of Death of Trustee" should be prepared and filed with the real property recording office in the county where the property is located. A form for this purpose is generally available from the local county law library. A separate affidavit must be filed for each real property title held in the trustee's name.
Personal Property Transfers
Bank accounts, stocks and other items of personal property registered with a financial institution or other company and held in the trust are typically transferred to the successor trustee by a document called a Certification of Trust. The purpose of this document is to provide the financial institution or company with proof of the existence of the trust and successor trustee's authority under the trust, without providing a complete copy of the trust. A properly prepared certification must comply with applicable state law by including certain minimum information about the trust, such as the name of the settlor, when the trust was made and whether the trust is revocable or irrevocable. Financial institutions and other companies often provide their own certification form that meets the legal requirements.
Personal Property Not Registered
A settlor often includes in his living trust all his household furniture and furnishings as well as other personal property that does not ordinarily include a registered title. When the settlor dies, this type of property is transferred to the successor trustee when he takes possession of it. In situations where possession of the property can be acquired without controversy, the successor trustee should simply take possession. However, if other persons may interfere or frustrate the successor trustee's efforts, a court order will be needed to take possession of the property.