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Back Up Plans: What if a Trustee Becomes Incapacitated

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 avoid the 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 with a Successor Trustee

The 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, notwithstanding 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.

Reach Out to Our Office for More Information

Trust documents are meant to be part of a comprehensive estate plan. 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.