A successor trustee is an individual who manages and controls a trust after its trustee dies or is incapacitated. For example, the person who creates a trust, called a grantor, may be his own trustee, managing and controlling the trust's assets. He may appoint another person to be his successor, managing the assets when he is no longer able to do so. While the successor trustee cannot use the trust's assets to his own benefit, unless he is also a beneficiary of the trust, he can sell, transfer, and distribute assets according to the instructions the grantor created for the trust.
When a trust’s grantor or original trustee dies or becomes too ill to manage the trust, the successor takes over. This person or organization has many of the same rights as the grantor or original trustee once he takes it over. He can make purchase and sale decisions for the assets in the trust, and he can distribute assets and income to the trust’s beneficiaries. This person cannot, however, change the details of the trust after the grantor or original trustee has died. Once the grantor dies or becomes incapacitated, the trust become irrevocable, which means no one can make changes to it.
Many people choose a friend or relative they trust to become successor trustees. Trustees can charge fees for managing trusts, and loved ones may be willing to do so for free. Even if they do charge, some people feel they will act with more care in handling the assets than an unknown party would. When a trust contains large sums of money and assets, a grantor may feel more comfortable selecting a business or professional to handle the trust. This is particularly true when the trust involves the management of investments, which may require a high level of expertise.
A person has the right to refuse to become a trustee for any reason, including having too many other responsibilities. In such a case, another person will usually take over the trust. A court may appoint a trustee if no alternate successor is named.
A successor trustee has the right to begin managing the trust immediately after the grantor’s death. There is usually no wait or reason to get a court involved. If the grantor is incapacitated, however, the successor may have to get a doctor to certify that the grantor is mentally or physically incapable of managing the trust.