One of the hardest roles of a lifetime? Being a successor trustee
Oct 11, 2023Marketwise column for the Bay Area News Group and its flagships The Mercury News and East Bay Times | Published: August 12, 2023
By Pat Kapowich
Question: Last month, my eldest brother’s wife began her role as successor trustee on behalf of a deceased out-of-town aunt. The aunt owned a large home. The disposition of the aunt’s belongings is underway. Next is the home sale. Yesterday I heard my brother praising the relinquishing of his designation as the successor trustee for our parents’ trust. Fascinating, considering this brother’s insistence 20 years ago to be named the successor trustee. It’s interesting timing. What does my brother now know that my parents, siblings and I do not?
Answer: Your brother has been experiencing a real-time, first-hand education of the duties and challenges of a successor trustee. He’s unpleasantly surprised. Perhaps your brother thought a successor trustee operates like a CEO. The successor trustee acts in many roles — especially as the investigator. Full stop. The immense loss of time a successor trustee spends pursuing paperwork and information is avoidable. Many successor trustees search a deceased person’s drawers and file cabinets. It’s akin to police work, patching a case together.
Death and money are rare conversation topics. Consider:
- The successor trustee needs to be proactively trained as the “chief financial officer” of the trustee’s estate. The successor trustee needs to be able to immediately access utility accounts, financial accounts, email pins, social media passwords, safe deposit boxes, reverse or forward mortgage accounts, sources of income, et cetera. In other words, while alive, the trustee must make the successor trustee’s job effortless versus a succession of avoidable time-consuming frustrations.
- Sadly, a joint meeting with the elder law attorney who created the trust is rare. The prudent trustees and their successor trustees must have that proactive one-hour consultation filled with questions, answers, advice, examples and instructions that will save countless hours and dollars. Conversely, to those who prefer to avoid that one-hour consultation fee, I say, “Frugality is expensive.”
- Your sister-in-law has time away from work, home and family. The estate might pay her a minimum wage per hour. Just keeping track of time is a chore. Your brother and his wife could be advancing payments to empty and ready the house for sale and, eventually, being reimbursed. The successor trustee should be paid well for their time. The successor trustee should use the financial resources of the deceased to settle the estate, not their own.
There is a saying, “Moving is the great American nightmare.” The successor trustee must ship, sell, trash or recycle the contents from the residence. A home located hundreds or thousands of miles away from the successor trustee is common. The husband of a successor trustee once aptly called it “waking up in someone else’s nightmare.”
Fond memories of the deceased stay prominent for the successor trustee only with detailed pre-death planning. There is an undeniable truth when trustees avoid discussing their demise and its ramifications with their successor trustees. Nothing is easy. The consequences of poor planning take hold. The home sale problems appear, and fond memories permanently fade.
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