Trustee Services

One of the most important decisions you will make is… who to choose as your Successor Trustee

A successor trustee is a fiduciary. That means that the person acting on your behalf must serve in a manner that is fair to all, but most importantly, holds the character of trust and confidence, and acts always in good faith. A trustee has a fiduciary responsibility to manage the trust assets as required by law (which includes the requirement to diversify the investments and sign a fiduciary investment policy), and to follow the terms of the trust and the requirements of applicable state law. A breach of fiduciary responsibility would make the trustee liable to the beneficiaries for any damage caused by such breach.

Upon incapacity, your successor trustee would step in and make sure all your bills are paid; that your investments are structured appropriately to ensure the proper income stream to meet your needs for your lifetime; pay for any necessary care, medical treatment, or alternate living arrangements (such as a rehabilitation center, assisted living facility, or skilled nursing facility).

Upon death, your successor trustee is required to do the following:

  • Review the terms of your trust to determine your intent on distribution
  • Notify the beneficiaries of your trust of your death and the existence of the trust
  • Fill out and Submit claim forms for all life insurance proceeds
  • Meet with your CPA regarding outstanding and upcoming tax issues
  • Work with family members to attempt to mediate disputes
  • If the home is to be sold, interview and hire the most appropriate realtor
  • Determine if assets will be liquidated and distributed to beneficiaries, or if assets will continue to be invested for the benefit of the beneficiaries
  • Meet with your financial advisor to determine appropriate investment and/or liquidation of assets
  • If sub-trusts need to be created for your beneficiaries, obtain the tax identification number for those trusts and determine appropriate funding
  • Determine how personal possessions are to be distributed and facilitate that process, after appraisals are done, if necessary
  • If the home is to be sold, determine appropriate repairs to the home in contemplation of sale and hire the appropriate contractors for the work
  • Cancel subscriptions
  • Pay all outstanding debts. Pay all bills as they come in. Pay all expenses of your last illness, funeral, and memorial service
  • Change the homeowner insurance on the home. Change the automobile insurance policy
  • Review mail and make notifications of death, as necessary
  • File your Will with the Court (required by law)
  • Have the home and any other real estate appraised
  • Change title on all assets. Obtain written date of death valuations for all assets
  • Notify the Department of Health Services of your death and determine if they have a Medi-Cal claim
  • If you own a home, secure the home (ie., change the locks and videotape the contents of the home)
  • Determine how retirement account proceeds should be distributed to cause the least tax consequences to your estate and your heirs
  • File an Affidavit of Death and applicable parent/child exemption forms with the County Assessor to avoid reassessment of property taxes
  • Meet/communicate with beneficiaries about how the administration will work and what to expect
  • Order Death Certificates

In other words, a lot of work! This process easily takes 200 to 300 hours of time, the first year…and it is not a job to be taken lightly. You hired a professional to prepare your estate plan and make sure wishes are properly documented; why not hire a professional to make sure your wishes are carried out as you intended?

We have become increasingly convinced that this decision is a business decision, and not an emotional one. Over the years, as we have assisted families in the administration of trusts following the death of a loved, we have watched the aftermath of the poor choice of choosing family or friends in this role. Often, the individual chosen does not have the skill set, time, professionalism, or integrity to carry out the role of a fiduciary. We have seen family members who are the successor trustees borrow the money for themselves, with no ability to repay; we have seen friends of the decedent steal the money and the heirs left with nothing because the friend is insolvent; we have watched families disintegrate when one child is picked as trustee over another, and the one with the power wields that power … destroying the family bonds. The business of choosing a trustee is not something to be taken lightly!

If you choose family or friends as trustee, you could run into the following issues:

  • Your trustee doesn’t know what they are doing, and ends up being sued
  • Your trustee is power hungry, and treats your beneficiaries unequally
  • Your trustee mismanages trust funds and loses your hard earned estate
  • Your trustee borrows trust funds, but can never repay
  • Your trustee refuses to the do the job
  • Your trustee steals trust funds
  • Your trustee doesn’t uphold their fiduciary duties and follow the law
  • Your trustee shouldn’t be in the role of his/her siblings keeper
  • Your trustee is already busy with their own life, and can’t handle this huge job in addition to their own responsibilities

All of these examples are very real…and very detrimental to your estate plan!

Here at DenHerder Grier & Associates we pride ourselves in fulfilling the duties of a Trustee in the most professional and ethical manner. Contact us today to discuss your Trustee needs.