If you have created an estate plan, or hope to create one, the selection of Successor Trustee is critical. Your plan is only as good as the one implementing it, and this short article will help you determine if you have made the right choice for you, and your loved ones.
First, let’s be clear about the role you are asking another to fill. Whoever is named as your Successor Trustee, Executor of your Will, and Agent under your Durable Power of Attorney (DPOA) will be 100% responsible for all their decisions regarding your Tax, Legal, and Financial issues. If you have also named this individual to serve as Agent for Health Care (AHCD), this person becomes responsible for your Quality of Life if you should become incapacitated. The jobs listed above make the one you select your Fiduciary, and this person must be able to put your needs before their own.
Banks and Trust companies do not serve as agents, either financial (DPOA) or medical (AHCD). Quite often, these institutions sell financial products, which creates a conflict of interest, and don’t want the medical liability. Loved ones who are your beneficiaries have a natural conflict of interest, and often struggle with financial and emotional decisions which affect them. These loved ones often mean well, but they have rarely done this kind of work before, and have no systems in place to handle it.
Professional Independent Trustees have received relevant training, continue their education, and have developed resources to serve their clients well, when the time comes: incapacity, resignation, or death. They are typically insured, and many have good internal controls so that the work is done properly, and all assets are accounted for correctly.
Here are some great questions to discuss with your attorney to select the right fiduciary for you:
What are your internal controls like?
How is my confidential information protected?
What happens to me if something happens to you? What is your succession plan?
You can find more great interview questions at https://fiduciary.ca.gov/forms_pubs/hire_fiduciary.pdf
Marguerite Lorenz, Master Trustee and Managing Partner, MyTrustee.net, Temecula, California