Florida Estate Planning: Is your successor trustee prepared to administer your estate?

When planning your estate, you likely set up a revocable living trust. This type of trust is foundational to most modern estate plans, and offers a wide variety of benefits to you and your loved ones. We recommend “RLT’s” to most of our clients, due in part to their versatility, streamlined management techniques, and distribution advantages.

Your trust will also help your estate avoid probate, which means the administration will move quickly and without the need for direct court supervision.?In turn, however, this means the successors you choose to serve in your place will have significant responsibilities. Thankfully, with a little planning, there are ways to ensure your successor trustee is well-prepared for what lies ahead.?

During the initial planning process, perhaps as an afterthought, you likely nominated your spouse or one of your children to serve as your successor. Nominating family members is quite common, as they are often the natural choice to ensure privacy and frugality. Many nominees are also named beneficiaries in the trust, so aside from a few notable caveats such as limited creditor protection, the choice makes perfect sense. ?

Sadly, many would-be successor trustees have no advance knowledge of what will be required of them during the asset distribution process. When asked to serve, most people feel a sense of pride. They are honored to be thought of so highly, and rightly so. The request is commonly made during a special dinner or other get-together, and after a gracious acceptance, everyone is left with a sense of fulfillment and peace of mind. Often, the matter is not discussed much afterwards, and unless you take calculated steps to avoid pitfalls—such as choosing a corporate fiduciary to assist them with their future role—then potential legal implications and fiduciary duties can easily be overlooked. When the time finally comes, the myriad of legal requirements can seem overwhelming, especially during what is often a time of intense mourning.?

Generally, I have found the underlying reason for such unpreparedness to be quite simple. While you are alive, your successor trustee likely sees you manage your trust as an “alter-ego.”?You don’t really answer to anyone, and you are generally in complete control of your assets. During this period, you have limited commitments to your beneficiaries. In addition, all trust assets are likely managed under your social security number instead of a Tax EIN.?

On the other hand, the responsibilities of a successor trustee are often vastly different to those of the trustmaker.?For instance, Florida law requires that a Notice of Trust be filed with the court in order for the powers of trustee to properly transfer to a successor upon the death of the trustmaker. The successor trustee must also file an Acceptance of Successor Trustee with the court, and they must send notice of these filings—and other pertinent documents—to various interested parties of the estate. In addition, your successor trustee must obtain a Tax EIN number before they can manage your financial accounts, and they are responsible for paying your creditors as well as for certain tax obligations of your estate. These issues, and more, must be settled before most distributions can be made.

With this in mind, it is easy to see why so many successor trustees are caught off guard when it’s finally time to serve. To the casual observer, the process can appear almost too simple - until it’s too late.

Thankfully, there are simple steps you can take to ensure your successor trustee is ready. One of the ways our firm tackles this issue is by holding an introductory meeting with you and your successor trustee. We don’t focus on the value of assets or amount of money in your accounts, but we do spend time discussing the underlying procedures that are required and responsibilities they will be held accountable for. An added benefit of the introductory meeting is that it allows your successor trustee to ask you questions to determine the intent behind various decisions.?

Work with your attorney now to avoid needless confusion and legal exposure for your loved ones later. If your successor trustee is adequately prepared, things can—and should—go relatively smoothly.?Ensure your successors understand what will be required of them and equip them with the tools they will need to administer your assets efficiently - and in accordance with your intent. ?

If you are in the Jacksonville area and would like to discuss, please reach out.?We are always happy to assist with Wills & Trusts, as well as related administration. Our office can be reached 24/7 by dialing 904-877-1010.

Rise Up Legal | Attorneys-at-Law

This article is for general reference purposes only.? The enclosed information does not constitute legal advice or the formation of a lawyer/client relationship. No representation is made that the quality of legal services from one attorney is greater than the quality of legal services performed by other lawyers.