Our office recently had the opportunity to represent a family regarding the settlement of a probate estate. In this case, a family member died and the adult children needed to settle the estate. This client had done a great job getting everything in order. He had established a living trust, will, powers of attorney, and living will. In addition, he had taken the steps necessary to ensure that his assets were retitled into the trust appropriately (the most important aspect of establishing a trust). His financial accounts were in order, his life insurance documents were in order, and the family knew exactly what they were going to have to do when he passed away.
Just about everything was in order except...
He didn't do the greatest job in picking the executor/trustee. This client had selected his oldest son, who lived out of state, as the successor trustee. This adult child had the responsibility of paying all the oustanding bills and distirbuting the assets to the other adult children in accordance with the provisions of the trust. However, the father felt obligated to name his oldest son as the successor trustee. Unfortunately, this was a foolish mistake. The eldest child had creditor issues, was irresponsible with money, and this caused severe problems when it came to the estate settlement. The eldest child starting withdrawing money from the trust accounts for his own personal needs, wasn't paying the bills, and was very difficult to communicate with. In the end, the family had to go to court to remove the eldest son as successor trustee.
All that this man wanted was for things to be simple, and because he didn't select the correct sucessor trustee, the settlement wasn't simple and ended up in court anyway (something he never wanted for his children).
When selecting a successor trustee you shouldn't just pick your eldset child out of default. You should consider whether the trustee is responsible with money, understands all the responsibilities involved in acting as trustee, and will likely get along with all the other beneficiaries. Failing to consider these aspects regarding your planning can result in all of your efforts being for not, and the trust ending up in court anyway.
If you have questions about estate planning or whether you should set up a trust, please review our website for more information or download one of our books and free reports. When you are ready to sit down with an attorney, contact our office for an initial consultation. As always, we are here to help.
Daniel A. Perry
Fidelis Law, PLLC