Most of us are at least vaguely familiar with the role of executor of an estate. The executor is the person, named in the will, who is in charge of carrying out the wishes of the deceased person. The executor gathers assets, pays bills and taxes, and eventually distributes what’s left to the people who inherit it.
We may not be so familiar with the person who has the comparable role when someone uses a trust, not a will, to leave property. That person is called a successor trustee.
First, the basics. A trust is an arrangement in which one person, called the trustee, controls property for the benefit of another person, called the beneficiary. The person who creates the trust is called the settlor, grantor, or trustor.
Many people create revocable living trusts (also called inter vivos trusts) to leave property to their loved ones. Why not just use a will? The answer is that when property left through a living trust, survivors don’t have to conduct a probate court proceeding before transferring the trust property to the beneficiaries named in the trust document. That saves the inheritors time and money.
With a simple living trust, the grantor who sets it up is usually also the trustee. That way, the grantor keeps complete control over any property that’s transferred to the trust. Grantors who later decide to revoke the trust or name different beneficiaries are free to do so. The trust document lists items of trust property and the beneficiaries who should inherit them.
But after the grantor dies, who serves as trustee? The living trust document, like a will, names someone to take charge of the property after the trust grantor dies. That person is the successor trustee. When the trust grantor dies, the successor trustee steps in to gather and safeguard trust property, reads the terms of the trust document to determine who should inherit what, and then transfers trust property to the trust beneficiaries.
Most people who create a living trust for estate planning purposes also leave a will. (A will can do certain things a trust document can’t, such as name a guardian for young children and take care of any property that wasn’t transferred into the trust during the grantor’s lifetime.) In many situations, the same person is named as both successor trustee of the trust and executor of the will. If two different people are named to these jobs, they must work closely together. They’ll need to coordinate their work on the legal and financial tasks that must be done after someone dies: gathering property, paying debts, filing tax returns, and distributing property to inheritors.
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A successor trustee who is dealing with a simple living trust, which is intended only to serve as a substitute for a will, can probably wrap up the job in a few weeks or months. Some trusts, however, are designed to last for many months or years. For example, a trust for young children may last until they are in their late 20s or even longer. In that case, the successor trustee will have a much bigger job than the executor of a typical will.