If you’re in the process of estate planning, your estate lawyer may have mentioned “trusts.” Trusts are a great way to protect your wealth for your loved ones once you’re gone. They may also be used as a way to gain tax advantages.
So, does creating a trust make you a trustee? Well, sort of.
Technically, the person who arranges the trust is referred to as the grantor. But once the grantor passes away or becomes incapacitated for any reason, trustee succession takes place.
What’s Trustee Succession?
Trustee succession is simply the process through which a trustee takes over the administration of a trust when the grantor or previous trustee has died, become incapacitated, or has resigned.
Trust agreements mention important details regarding trustee succession including names of successor trustees. They may also mention whether there are to be co-trustees, how exactly the succession is to take place, and the resignation process as well.
Most grantors select family members including spouses, or their children as trustees. However, a professional trustee who’s more well-versed with the management aspects of a trust can also be chosen as the successor trustee.
How Does Trustee Resignation Work?
As is obvious by the phrase, trustee resignation refers to the process of a trustee signing off from their responsibilities as a trustee.
Trustee resignation is usually defined by two things. Firstly, the law of the particular state where the trust is created. And also, the resignation terms mentioned in the trust agreement.
So, if you wish to resign, go over the original Trust agreement. This will tell you if there is a successor trustee already listed. If there isn’t one, you may be able to appoint a new one. Or they can be chosen by the original grantor (if alive, of course) or perhaps the beneficiaries. And if none of the options are applicable, then the court can come up with a new name for the trustee.
Once a new trustee is appointed, all you really need to do is fill in and sign the resignation form and provide the complete records and documents of the trust’s management during your tenure.
Why Would One Want to Resign as A Trustee?
Managing a trust can become an overwhelming responsibility. One may think they’re up for it, only to realize later that it’s far too much responsibility. Or in some cases, trustees may suffer from health conditions that no longer allow them to carry out their administration duties the same way.
But regardless of whether you have a valid reason or not, you can usually resign from your duties as a trustee at any point. All you need to do is ensure that all the terms of the trust are being respected and upheld and that your resignation is in line with the law.
If you need help with the legalities of resigning from a trust, get in touch with a litigation lawyer. And if by any chance you require Litigation lawyer Queens and Litigation lawyer Brooklyn or surrounding areas, you can give us a call.
Ledwidge & Associates
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