Understanding the Role of a Successor Trustee: Key Responsibilities and Duties

When someone creates a trust as part of their estate plan, they must name a successor trustee—the person who will step in to manage the trust after the original trustee (often the trust creator) becomes incapacitated or passes away. At Bayside Law, we recognize that accepting this role is a significant responsibility, and many clients are unsure about what exactly a successor trustee does. This important position comes with legal obligations and fiduciary duties that require careful attention and diligence.

The primary duty of a successor trustee is to administer the trust strictly according to its terms while acting in the best interests of the beneficiaries. This means the successor trustee must first thoroughly review and understand the trust document, identifying all assets owned by the trust, notifying beneficiaries of their status, and managing or distributing those assets as directed. They must maintain meticulous financial records, file necessary tax returns, and provide regular accounting to beneficiaries. Throughout this process, successor trustees must avoid conflicts of interest and cannot use trust assets for their personal benefit—the law holds them to a high standard as fiduciaries.

A successor trustee must also handle the practical aspects of trust administration, which often includes taking inventory of trust assets, obtaining appraisals when necessary, managing investments prudently, paying debts and expenses, and ultimately distributing remaining assets to beneficiaries. Depending on the trust's complexity, this might involve maintaining properties, handling business interests, making investment decisions, or coordinating with financial advisors and accountants. For trusts established to care for beneficiaries with special needs or those structured to distribute assets over time, the successor trustee may serve for many years, requiring ongoing commitment and attention.

While the role carries significant responsibility, successor trustees are not expected to navigate these duties alone. At Bayside Law, we regularly advise successor trustees on fulfilling their obligations while minimizing personal liability. Professional guidance can help successor trustees understand when they have discretion to make decisions, how to communicate effectively with beneficiaries, when to seek court approval for certain actions, and how to handle disputes that may arise. If you've been named as a successor trustee or are creating an estate plan that includes naming one, consulting with an experienced estate planning attorney can provide the peace of mind that comes with proper preparation and understanding of this vital role.

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This blog post is for informational purposes only and does not constitute legal advice. For guidance specific to your situation, please contact Bayside Law to schedule a consultation.