What to Do if You Become Trustee of An Estate?

Aug 24, 2022

You have just been informed that you were named as the Successor Trustee of someone’s estate, and that person is now deceased. You may or may not have known about your nomination for that position. But in any case, what should you do after you have decided to accept an appointment as Successor Trustee?

In most cases, contact your Attorney

Unless the trust is a straightforward one with little needing to be done, it is essential to talk to the attorney who prepared the documents or with some attorney who works in the field of Trusts and Estate. You will need to decide pretty quickly whether or not you want to serve as Successor Trustee or what options there may be if you don’t.

Become familiar with the trust documents

The trust document(s) should set forth exactly what your responsibilities are and how to carry them through. It may confuse you if you haven’t had any experience with trust and how a trust operates.

Remember that you serve as the “Fiduciary” on behalf of the trust’s Beneficiaries

Whether or not you are an actual beneficiary, it’s important to remember what “hat” you wear as the person with fiduciary duties under the trust. Being a fiduciary means putting the beneficiaries’ interest ahead of any claim or opinion of your own. You are responsible for ensuring the “estate” is maintained in a way that doesn’t cause “waste,” that it has the opportunity to grow, and that it is as productive as reasonably possible. Ultimately you are responsible for getting the assets in the trust to the actual beneficiaries.

Contact the Beneficiaries

Once you have confirmed the beneficiaries’ identification and their interests in the trust, contact them and let them know that you are in charge and will keep them informed as you move to “settle” the estate.

Become aware of tax issues

Trust assets get taxed at a different rate than individuals. And there may be a tax due to the Commonwealth of Massachusetts if the estate is large. If you are unfamiliar with tax impacts on trusts and estates, discuss tax issues with your lawyer, an accountant, or both.

Make sure you can control the trust Assets

In most cases, it is necessary to sign a legal document accepting the position of Successor Trustee. Once that is done, you must obtain control of the trust assets. Often that means getting a tax i.d. number for the trust and using that number on accounts held by the trust. Again, seek professional advice.

Remember that the trust probably needs to file a Tax Return

Once the original Trustor (the person or persons now deceased) is gone, any revocable trust can no longer use the Social Security number of the Trustor and needs to file its tax return. Discuss this with your attorney and accountant.

As you can see, the responsibilities of a Successor Trustee are significant. But they don’t need to be overwhelming if you seek the proper advice. Lantz Law, Inc. is seasoned in the field of trust administration. The professionals there can ease your burden and help you through what may appear to be a maze of obligations. Contact them early in your service time as Successor Trustee.