So, you’re creating or changing a revocable living trust, and you tell your estate planning attorney that you wish to name your child as Successor Trustee.
Your Successor Trustee is the person who will step in to handle your trust assets when you become incapacitated or die. You have three children who all get along famously. Should you name one of them as your Successor Trustee?
No.
Okay, maybe that’s an overly-simplified answer. I’ll change it to “probably not.” Naming one of your children as Successor Trustee almost always results in conflict and may end up tearing your family apart.
One child as Successor Trustee
There are occasions when putting one child in charge of the money and property that their siblings will receive works out well and everyone stays friendly. Generally, in these cases the siblings
- were all the product of the same long-term marriage,
- were all very close before their parent’s death,
- were all aware of the parent’s estate plan before the death,
- were all similarly situated financially before the inheritance,
- lived close enough to each other to split any sentimental items among themselves while all siblings were present,
- pretty much equally shared the burden of care-taking for the deceased parent,
- had no addiction or gambling problems in their families,
- didn’t allow their spouses or adult children to have a say in the probate or trust administration process, and
- the Successor Trustee’s only job was settling the estate and dividing up the assets equally for immediate outright distribution to all the siblings.
If this sounds like your situation, then naming your child as Successor Trustee may work out just fine.
Multiple children as Co-Successor Trustees
Some folks think naming all or a couple of their children as Co-Successor Trustees will prevent conflict. It won’t. In fact, it can even be worse than naming only one child as Successor Trustee because now two or more people have to agree on everything and sign all the necessary paperwork. Banks and financial institutions hate co-anythings because all it does is slow down any process and open the door for conflicts and lawsuits.
So what’s the solution?
Name a disinterested party. Someone who has no skin in the game. Someone who has no close personal relationships with any one child and will not be inheriting anything from you. It can be a friend, your sibling, your accountant or estate planning attorney, or other professional fiduciary. If your trust will last more than a few years, consider naming a bank or trust company.
What was that? You don’t want to pay someone to manage your trust? Seriously? You’d rather tear your family apart and have litigation attorneys receive the bulk of your children’s inheritance? You can certainly make that choice.
Whatever you decide to do, TALK TO YOUR FAMILY! Explain why you’re naming one child as Successor Trustee, or leaving more money to the caretaker child, or appointing a disinterested party, or disinheriting a child or grandchild. If you’re not comfortable doing it by yourself, ask your estate planning attorney to help you arrange a family meeting in person or by teleconference. It’s not an easy conversation, but it just may keep your family together after you’re gone.
