Successor Trustee Responsibilities

While some consider becoming a successor trustee a great honor, it is also a great fiduciary responsibility. As successor trustee, it is your duty to ensure that the trust estate is handled according to the trust document and the trustor’s wishes. When a loved one passes away, there are many tasks to be done and things to consider.

Actions the successor trustee should consider

1. Review the trust. In order to properly execute according to the trust, it is important to read the document. You should understand the trustee’s powers and be able to identify the various individuals associated with the trust.

2. Locate the will. Contact the attorney’s office to obtain a copy of the will and any codicils. Sometimes the decedent will also leave letters of instruction. You should know who acts as the executor or personal representative of the will.

3. Obtain the Death Certificate(s). Death Certificates are needed to file claims for life insurance benefits and to transfer other assets. You should order several copies.

4. Notify the post office of change of address. Additionally, cancel any unnecessary subscriptions, such as newspapers, magazines, etc.

5. Cancel unnecessary services. Cancel services such as phone, internet, cable, etc. Pay all bills as an expense of the trust.

6. Contact attorney. Have the attorney prepare a Certificate of Incumbency/Formal Acceptance and a 90-day notice to creditors for both the decedent and the trust. Even if you believe there are no creditors, this should be done to cover all legal grounds.

7. Prepare an inventory of trust assets. All assets should be valued as of the date of death.

8. Verify all assets are held in the trust name. If there are any assets not titled in the trust, discuss this with an attorney. The attorney can determine whether the assets will be probated.

9. Secure home/property. Visit the property and change the locks on all doors and gates. If a rental property is under lease, contact the tenant to inform them of the change of trustee and provide them with a new address to send rent payments.

10. Vehicles. Obtain the title for distribution or sale. After the distribution or sale, cancel the auto insurance.

11. Obtain market value of securities. The total value of all property in the trust will determine whether it will be necessary to file federal and state estate tax returns.

12. Check for safe deposit box. If there is a safe deposit box, look for any instructions that may have been left and prepare an inventory of its contents.

13. Bank accounts. Re-register bank accounts under the new trustee. Make sure enough funds are available to pay expenses such as the funeral cost.

14. Check for storage units. If there are any storage units, the items should be appraised and inventoried.

15. Notify life insurance company. Request the beneficiary packet, complete the paperwork, and provide the necessary information to process the claim.

16. Promissory note. Collect and review a copy of the note(s). Contact the payor and inform them of the new trustee and where to send future payments.

17. Review business agreement. Review any business agreements, contracts, stock certificates, partnership agreements, etc., to which the grantor or the trust is party. If the trust property includes a business interest, document the value of it if either the estate is likely to be taxable or the business interest will be sold. To obtain this valuation, hire a qualified appraiser of business interests or a CPA experienced in business valuations.

18. Obtain appraisals. Get appraisals for artwork, collectibles, antiques, cars, boats, RVs, etc. Check to see if any of these items are to be distributed as a specific bequest. If not, and if no beneficiary wants them, sell the items.

19. Review investments. Ensure the current investments retained in the trust are appropriate for the income and growth objectives of the trust.

20. Credit cards. Collect all cards, cancel, and destroy them. Ensure that all final bills have been paid.

21. Review and pay bills. Pay all permissible expenses related to the grantor. Begin making payments for trust expenses.

22. Distribute personal effects. Distribute any personal effects and household furnishings per the trust document.

23. Animals. Locate, secure, and follow provisions for care of any pets.

24. Contact the CPA. If the CPA is unknown, hire a new CPA and request transcripts of past returns from the IRS.

25. New Taxpayer Identification Number. When a revocable trust becomes an irrevocable trust due to death, you will need to get a new taxpayer identification number from the IRS. Complete IRS Form SS-4 to do this.

26. Work with the CPA to file income tax return and pay taxes. Work with the grantor’s CPA to ensure a final tax return is filed in addition to filing federal and state fiduciary income tax returns.

27. Distribute the assets. Follow the terms of the trust documents and begin distributing assets to beneficiaries.

With so many tasks falling on the successor trustee, it is important to surround yourself with trusted advisors. To assist you in your duties as successor trustee, we suggest you consult with the estate planning attorney, your CPA, and your financial advisor.

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