02 Mar Can My Successor Trustee Change My Trust? Jacob K. Wooley, Partner
Avoiding probate and court supervision while wrapping up an estate is a point of emphasis in almost every estate plan I provide. When I explain that using a Revocable Living Trust will allow them to put a Trustee of their choosing in place to handle their estate wrap up, and that person will not need court permission or oversight, it often leads to questions about what boundaries a Successor Trustee really has.
A Revocable Living Trust is initially put in place by the “Settlor” or the person or persons whose assets will be handled through the Trust. A Settlor has the power to change the terms of the trust as long as they are alive and able. Most commonly, the Settlor is the initial Trustee. A Trustee has the power to manage Trust assets and to conduct business on behalf of the Trust. When a Revocable Living Trust is revoked, altered, amended, or modified, it is done so by the Settlor. Even if the Settlor and the Trustee are initially the same person or persons, the changes are made by that person acting in their capacity as Settlor. This means that a Trustee never really changes a Trust.
If there is more than one Settlor, a Trust can be changed by a surviving settlor if those terms are clearly stated when creating the trust. When all Settlors have died, the Trust becomes Irrevocable; meaning the terms of the Trust cannot be changed. A Successor Trustee has a fiduciary duty to carry out the instructions in the Trust without change. A fiduciary duty is enforced by the law, and if conflict arises, a Successor Trustee can be held to task by any beneficiary harmed by Trustee misconduct.
If clients have concerns about appointing a loved one as Trustee, there is always an option to hire a professional Trustee. Most banks and financial advising institutions offer Trustee services for certain assets. The attorneys at Crain & Wooley can also serve as your Successor Trustee to make certain your estate is managed and distributed properly.
If an estate needs flexible management, options can be added to the terms of a Trust that allow for a “Trust Protector”, which can be one person or a small committee, to make necessary changes due to a variety of occurrences after a Trust becomes irrevocable. The Trust Protector is not necessary in all plans but is a good idea if there are generational assets being held by the Trust for long periods of time.
In closing, a Revocable Living Trust cannot be changed or altered by your Successor Trustee. A Trustee is bound by a fiduciary duty to adhere to the instructions in the Trust. Revocable Living Trust are very customizable and allow for almost any issue to be planned for in detail.
If you have more questions about what a Successor Trustee can or can’t do? Comment below!