A trust is a legal entity in which a trustee serves as custodian for the property of an individual, known as a grantor, who may also act as the trustee himself. The trustee holds legal title to the trust property; he also has the responsibility to manage the property for the benefit of the grantor and the trust’s named beneficiaries. When a trustee is no longer willing or able to carry out these duties, a successor trustee assumes the role.
A trust is governed under the state law in which it was formed. State laws set out the legal guidelines for the naming and acceptance of a successor trustee. Ordinarily, the grantor names successor trustees in the original trust documents, which also should set out the circumstances upon which a successor trustee may assume responsibilities.
Acceptance and Affidavit
A successor trustee must contact trust beneficiaries, inform them of his appointment and keep them informed of the actions he takes regarding the trust. State law may mandate that the successor trustee sign an oath and/or acceptance. This document is a legal acknowledgment by the successor trustee that he is taking responsibility for management of the trust. The oath is taken before a notary public or court clerk as witness. In the case of an original trustee’s incapacity, the law may also require the filing of an affidavit or statement from a physician confirming that the trustee can no longer manage the trust.
In states where it is required, the acceptance must be filed in the civil court with jurisdiction over the trust. A successor trustee may also be required to file a certificate of trust, which should also be provided to beneficiaries and other parties of interest such as accountants, attorneys and account custodians. The court will review the acceptance and/or certificate of trust to ensure that the successor trustee is capable of managing the trust in the best interests of the grantor and beneficiaries.
Death of Grantor Acting as Trustee
If no successor trustee was named in the trust documents, the court may appoint one. On the death of a grantor who was acting as trustee, the successor trustee files an affidavit and a death certificate with the courts, as well as the oath and acceptance if required, to transfer and assume trustee responsibilities. The successor trustee must notify all the beneficiaries of his appointment, take an inventory of the trust assets, pay the trust’s debts and taxes, and distribute the remaining assets according to the trust’s instructions.
Read More: Death of a Trustee & a Name Change on a Title