Trusts are a valuable tool to protect your heirs in the event of your death
or incapacity. In effect, assigning a trustee to manage your affairs while
you are alive (using a living
trust) or distributing your assets as per your directions upon your death, helps
probate process. However, one of the issues that is seldom discussed is what to
do if your trustee becomes incapacitated before the estate is closed out
and the purpose of the trust has been accomplished.
Planning Ahead Is Necessary
responsibilities of a trustee are to handle your affairs in accordance with the terms of the trust agreement.
However, a trustee who is older may suffer from memory problems and may
ultimately be unable to act in their capacity as a trustee. This means
that you need to build a backup plan into your trust agreements to ensure
you have planned for this possibility. Specifically, you can have a second
trustee (a co-trustee) or you can have what is known as a "successor
trustee". For most people, a successor trustee is the better option.
What is a Successor Trustee?
Successor trustees take over when the original trustee is no longer able
to fulfill their duties under the terms of the trust. Under
California's Probate Code Section 16012, there is specific language stating "The trustee has a duty not to delegate to others the performance of acts
that the trustee can reasonably be required personally to perform and
may not transfer the office of trustee to another person nor delegate
the entire administration of the trust to a co-trustee or other person."
However, not withstanding this clause, the maker of the trust does have
the option to set out specific language that clearly states under what
circumstances a successor trustee can take over the trust. For example,
if the trustee is declared incompetent because of mental illness, develops
Alzheimer's disease or becomes physically unable to carry out their
responsibilities as trustee, then the successor would take over.
Trust documents are meant to be part of a comprehensive estate plan and
oftentimes, those who establish a trust do not think about who will manage
the plan should the original trustee become incapacitated or die. It is
imperative that you
speak with an estate planning attorney at the Law Offices of James C. Shields to ensure that your trust will
be administered properly in the event of the incapacity of the original trustee.