SUCCESSOR TRUSTEE HANDBOOK

Successor Trustee Handbook

Serving as the successor Trustee of a trust is an important responsibility. You have been chosen because the trust’s creator (the Settlor) trusted your judgment and integrity. This handbook will walk you through your duties and help you understand the steps involved in administering a trust after the death of a loved one.

As a Successor Trustee, you step into the shoes of the deceased Settlor and are responsible for managing and administering the assets of the Trust in accordance with its terms. You have a fiduciary duty to act in the best interests of the beneficiaries by acting impartially and exercising care, skill, and prudence in managing and distributing the assets of the Trust.

Note: Many of the following steps can and should be undertaken simultaneously.

I. Locate and Review All Estate Planning Documents

  • Locate the original Trust instrument and any amendments.
  • Thoroughly review the Trust to understand the terms, conditions, and your responsibilities as Trustee.
  • Review all original estate planning documents to understand how they are connected.

II. Consult with Professionals

  • Attorney: Retain an attorney experienced in Trust Administration to guide you through the process and protect you from liability.
  • Financial Advisor: You have a duty to preserve, protect, and grow Trust assets. A professional can help you meet these obligations.
  • Accountant: Work with an accountant familiar with estate tax returns and fiduciary returns for the Trust.

III. Identify and Inventory Assets

Make a detailed inventory of the deceased Settlor’s assets, including:

  • Real estate, bank accounts, life insurance, investment accounts, and personal property
  • The current value and how each asset is titled

Trustee’s Duty: Secure and preserve Trust assets. This may include changing locks, obtaining insurance, or arranging for management of a business owned by the Trust.

IV. Notify the Beneficiaries

  • Notify beneficiaries that you are the successor Trustee.
  • Provide them with a copy of the Trust, any amendments, and your contact information.
  • Maintain transparent and regular communication, including updates on the administration process, anticipated distributions, and financial reports.

V. Obtain an EIN (Tax ID Number)

Upon the Settlor’s death, the Trust becomes irrevocable. You must obtain a Tax ID Number from the IRS, as the Trust can no longer use the Settlor’s Social Security Number.

VI. Open a Bank Account

  • You may temporarily access existing Trust bank accounts using a Certification of Trust.
  • Eventually, you must establish a new Trust bank account under the Trust’s EIN.

VII. Pay Debts and Expenses

  • Work with the Personal Representative (if applicable) to handle assets outside the Trust.
  • If no estate administration exists, determine and pay the decedent’s debts, cancel services (credit cards, utilities, etc.), and close accounts as needed.

VIII. Manage Assets & Administer the Trust

Once assets are under your control, debts are satisfied, and tax filings are complete, you can distribute assets to beneficiaries in accordance with the Trust’s terms. This may involve:

  • Establishing additional trusts (with separate tax IDs)
  • Distributing assets directly to beneficiaries, in cash or in-kind

Key Points for Trustees

  1. Keep meticulous records of Trust income, expenses, and distributions.
  2. Do not mix Trust assets with your own—keep separate accounts.
  3. Do not use Trust assets for personal benefit (unless expressly authorized by the Trust).
  4. Act impartially toward all beneficiaries unless the Trust states otherwise.
  5. Invest Trust assets prudently for reasonable growth with minimal risk.
  6. Provide yearly financial reports to beneficiaries.
  7. Obtain signed receipts and releases whenever making distributions.

Final Thoughts

Serving as a successor Trustee is both a responsibility and an honor. You have been entrusted with carrying out your loved one’s wishes during a time of grief and transition. It’s natural to feel overwhelmed, but with proper guidance, you can fulfill your duties confidently and competently.

Remember: Take things step by step, keep thorough records, and seek professional help when needed. By handling these responsibilities thoughtfully, you are honoring the trust placed in you and preserving the legacy of the person who chose you for this role.

Douglas J. Carroll, Jr.
Attorney at Law

333 Bishops Way, Suite 118
Brookfield, Wisconsin 53005
(262) 432-7301
djc@weplanestates.com

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