What Does a Successor Trustee Do?

The short answer

A successor trustee is the person or company who takes over managing a living trust when the person who created it dies or can no longer manage it. Their job is to follow the trust's instructions: gather and protect the trust's property, pay its bills and taxes, keep the beneficiaries informed, and hand out what is left to the people named. Under the Uniform Trust Code, a model law that many states have adopted with their own changes, a trustee has 60 days to notify beneficiaries once a revocable trust becomes irrevocable. Deadlines differ by state. For example, Massachusetts allows 30 days and Maryland allows 90.

When does a successor trustee step in?

Most people who create a revocable living trust, a trust you can change or cancel during your life, serve as their own trustee. That person is called the grantor, or settlor. While they are alive and able, the trustee's duties are owed to them alone.

A successor trustee takes over at one of two moments:

• Death. When the grantor dies, the trust becomes irrevocable, meaning it can no longer be changed, and the successor trustee begins to settle it.
• Incapacity. If the grantor can no longer manage their own affairs, the successor trustee can step in while the grantor is still living. The trust document sets how incapacity is shown, commonly through a written statement from one or more doctors.

Because property in a properly funded trust does not pass through probate, the court process that settles an estate, a successor trustee usually does this work without court supervision. (Funding means retitling property into the trust's name; our guide on how to fund a living trust explains it.)

What are a successor trustee's legal duties?

A trustee is a fiduciary, someone legally required to act for other people's benefit. The Uniform Trust Code spells out the core duties, and many state trust codes use similar language.

• Follow the trust. A trustee must administer the trust "in good faith, in accordance with its terms and purposes and the interests of the beneficiaries."
• Loyalty. A trustee must act "solely in the interests of the beneficiaries." Deals that mix trust money with the trustee's own interests, like buying a trust asset personally, can be undone by an affected beneficiary.
• Prudence. A trustee must use "reasonable care, skill, and caution," as a careful person would.
• Protect and separate. A trustee must take control of trust property, keep it separate from their own, and keep adequate records.
• Inform and report. A trustee must keep beneficiaries reasonably informed and, under the Uniform Trust Code, send regular reports on assets, income, expenses and the trustee's own pay.

How long does a successor trustee have to notify beneficiaries?

Under Section 813 of the Uniform Trust Code, a trustee has 60 days after learning that a revocable trust has become irrevocable, whether by the grantor's death or otherwise, to notify the qualified beneficiaries. The notice covers the trust's existence, who created it, the right to request a copy of the trust document, and the right to a trustee's report. Many states adopted the Uniform Trust Code with their own changes, so this is where state law matters most.

How notice deadlines differ by state

Deadlines differ by state. For example, some states shorten or lengthen the 60 day window, and some do not use this notice rule at all. The table below shows examples, not a complete list.

Other states set their own rules, which can differ from these examples. Readers can check how their own state handles trustee notice through the plan finder and state guides such as Maryland, Arizona and Texas.

What a successor trustee does after the grantor dies

The work usually follows this order:

1. Find and read the trust document, including any amendments, and confirm that they are named and willing to serve.
2. Get several certified copies of the death certificate.
3. Take control of trust property. Locate accounts, real estate, and valuables titled in the trust's name, and secure them.
4. Get a new tax ID for the trust. The IRS says a revocable trust must obtain a new taxpayer identification number after the grantor's death.
5. Notify beneficiaries within the deadline state law sets; see the examples above.
6. Inventory and value the assets, and keep records of every dollar in and out.
7. Pay valid debts, expenses and taxes from trust funds. A trust with gross income of $600 or more generally files a federal income tax return, Form 1041.
8. Coordinate with the executor if there is also a will. A pour over will moves any property left outside the trust into it.
9. Distribute the property as the trust directs, with a final report to the beneficiaries.

Successor trustees commonly hire an estate planning attorney, an accountant, or both for parts of this list, and under the Uniform Trust Code, expenses properly incurred in running the trust are reimbursed from trust property.

Can a successor trustee also be a beneficiary?

Yes, and it is common for an adult child to be both. The one limit in the Uniform Trust Code is that the same person cannot be the only trustee and the only beneficiary. A trustee who is also a beneficiary still owes the same loyalty to everyone else named in the trust.

Does a successor trustee get paid?

Generally yes. If the trust does not set the pay, the Uniform Trust Code and state statutes, for example Arizona, Maryland and Texas, allow compensation that is reasonable under the circumstances. If the trust does set it, that amount usually controls. Many family trustees who also inherit choose to waive a fee.

Can a successor trustee say no or resign?

Yes. Naming someone does not force them to serve. A person who does not accept within a reasonable time is treated as having declined, and the next named successor steps up. A trustee who has started can generally resign with at least 30 days' notice to the beneficiaries, or with court approval. Resigning does not erase responsibility for anything done while serving.

What to look for when choosing a successor trustee

• Trustworthiness with money and with family relationships
• Organization, since the job is mostly records, deadlines and follow through
• Willingness, confirmed in a conversation before the document is signed
• Availability, including time and health
• Fairness that beneficiaries will recognize, especially in a blended family
• A backup, so there is a second successor if the first cannot serve

Some people name a bank or trust company, which charges a fee but brings experience. Our guide on how to choose the right trustee for your living trust walks through the tradeoffs.

How Inhira fits

The Complete Trust Plan includes a revocable living trust where you name your successor trustee, plus a pour over will, a financial power of attorney and a healthcare directive, all created from attorney reviewed templates. It takes about an hour, start to finish. If your estate is small and simple, a will may be enough; our wills vs trusts comparison helps sort that out. Details are on the living trust page.