Missouri Appointment of Successor Trustee
Description
Key Concepts & Definitions
Appointment of Successor Trustee: This refers to the process in which a new trustee is designated to manage the trust upon the incapacity, death, or resignation of the original trustee. Trust Administration: This involves managing and executing the terms of a trust according to the legal requirements and for the benefit of the beneficiaries. Estate Planning: The preparation of tasks that serve to manage an individual's asset base in the event of their incapacitation or death.
Step-by-Step Guide on Appointing a Successor Trustee
- Review the Trust Document: Identify the provisions for appointing a successor trustee mentioned in the original trust document.
- Selecting a Successor: Choose a competent individual, financial institution, or a combination of both that aligns with the trust's goals and objectives.
- Notify All Parties: Inform all beneficiaries and related parties about the appointment of the new trustee.
- Transfer Authority: Officially transfer authority over trust assets and financial accounts to the new trustee.
- Documentation: Update all related documents and records to reflect the change in trusteeship.
Risk Analysis
- Lack of Proper Documentation: Inadequate documentation can lead to disputes among beneficiaries and legal complications.
- Selection of Inappropriate Trustee: Choosing an unqualified or unsuitable trustee can lead to mismanagement of assets or conflict within the trust administration.
- Legal Non-Compliance: Failure to follow legal protocols in the appointment process might invalidate the succession.
Best Practices
- Seek Professional Advice: Consult with estate planning attorneys to ensure legal and effective transition.
- Clear Communication: Maintain transparency with beneficiaries to prevent misunderstandings and disputes.
- Regular Updates: Regularly review and update the trust documents to adapt to changes in laws and personal circumstances.
Common Mistakes & How to Avoid Them
- Neglecting to Update the Trust Document: Regularly revisit and revise the trust document to reflect current wishes and legal standards.
- Failing to Clearly Define the Role of Successor Trustee: Clearly outline the responsibilities and authority of the successor trustee in the trust document to avoid ambiguity and power abuses.
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FAQ
Nolo's Living Trust does not currently allow you to name an institution as successor trustee. If you want to do so, you will need help from an attorney. Normally, your first choice as successor trustee should be a flesh-and-blood person, not the trust department of a bank or other institution.
Trustees are entitled to reasonable compensation whether or not the trust explicitly provides for such. Typically, professional trustees, such as banks, trust companies, and some law firms, charge between 1.0% and 1.5% of trust assets per year, depending in part on the size of the trust.
Successor trustees are appointed in the trust document itself. The trustor will specify who they want to take over management of the trust if and when they can't do it themselves.
Most corporate Trustees will receive between 1% to 2%of the Trust assets. For example, a Trust that is valued at $10 million, will pay $100,000 to $200,000 annually as Trustee fees. This is routine in the industry and accepted practice in the view of most California courts.
Under California Probate Code section 15680, a trustee is entitled to be compensated as set forth in the instrument. For example, the instrument might state that the trustee shall receive a management fee of one percent of the value of the trust assets per year, with pro ration for partial years.
Most professional Trust Companies (Administrators) will typically charge between 1% to 2% for a Trust estate that is settled within one (1) year, or 1% to 2% annually, based on the net value of Trust Assets under Management.
Successor trustees have to willingly accept their role usually by signing a consent to serve or affidavit of appointment. If an existing trustee wishes to change their successor trustee, they must make an actual amendment to the trust. Most courts won't accept informal, self-made changes.
Do Successor Trustees Get Paid? YES, Successor Trustees can get paid or they may volunteer.
For a revocable living trust, that Trustee is usually the person that created the trust.The successor trustee usually takes power when the person that created the trust either becomes incapacitated or has died. The Trustee only manages the assets that are owned by the trust, not assets outside the trust.