Like many people, you may decide to include a trust agreement in your overall estate plan. If you do include a trust in your estate plan you will need to make a number of important decisions when you create your trust, including the appointment of a trustee. One common mistake people make, however, is to not include the appointment of one or more successor trustees and/or a provision in the trust that determines how a successor trustee will be appointment should one be necessary. This error is particularly common when a “do-it-yourself” or online trust agreement form is used to create thee trust. If you plan to create a trust it is imperative that you understand the importance of designating a successor trustee.
Although a trust agreement can be used to achieve a wide variety of goals and objectives, all trusts require the same basic elements for creation – a trustor (the person who creates the trust), a beneficiary (the person who benefits from the trust), trust terms, funding for the trust, and a trustee. The trustee has a number of important duties and responsibilities to fulfill, including:
-
Following the terms of the trust
-
Managing trust assets
-
Investing/growing trust assets
-
Communicating with beneficiaries
-
Disbursing funds according to the trust terms
-
Preparing and paying trust taxes
Without the trustee, the trust cannot function, yet people frequently fail to consider the possibility of something happening to their appointed trustee. Any number of things could occur to the appointed trustee, including death, incapacity, or even incarceration. Moreover, the appointed trustee could simply not wish to accept the appointment. If the trust agreement is silent on the subject of a successor trustee, the only option is to turn to a court for guidance. Asking a court to appoint a trustee can be costly and time consuming. In addition, the trustee appointed by the court will clearly not be anyone you intended to manage your trust assets.
The way to avoid these potential problems is to have an experienced Missouri estate planning attorney draft your trust agreement for you. Doing so will ensure that at least one successor trustee is appointed. In addition, your trust agreement will include directions that will determine how an additional successor trustee is to be appointed should one be needed.
If you have additional questions or concerns about trust agreements or estate planning in general, contact the experienced Missouri estate planning attorneys at Amen, Gantner & Capriano, Your Estate Matters, LLC by calling (314) 966-8077 to schedule an appointment.
- Taxation of Nongrantor Trusts - October 6, 2021
- Dangers of Do-It-Yourself Estate Planning - September 27, 2021
- CRT: Best Tool for Proposed Tax Changes? - June 9, 2021
