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Elder law: understanding your duties as successor trustee

When a person in New Jersey creates a trust, they often name a loved one as successor trustee. However, these successor trustees do not always know what to do in their role to formally become the trustee. They may simply ask their loved ones to sign checks so they can pay the bills, or they may take their loved one to the bank and ask to be placed as a signatory on the account. Doing these things informally, however, can lead to problems down the road.

Usually, a trust will have language in it that outlines how the successor trustee will step into their role as trustee. Oftentimes, a physician will first need to determine that the person who created the trust can no longer take care of their financial affairs due to incapacitation. After obtaining such a statement from the loved one's physician, this statement should be given to the bank, along with a written acceptance as trustee. This will formally make it so that the successor trustee can make financial decisions on the grantor's behalf. It also protects the grantor from their own inability to make sound decisions due to incapacitation.

In addition, having a successor trustee in place can also protect the person who created the trust from being exploited after incapacitation. Without a legal successor trustee, an incapacitated person could fall victim to someone who has them make withdrawals from their bank accounts, and then give the money to that person. Also, by formally naming someone as successor trustee, it can prevent fights among family members as to who should have financial control over their incapacitated loved one.

In the end, as part of care planning, many people create a variety of types of trusts and name someone as successor trustee to these trusts. However, successor trustees need to have a good understanding of how to formally and lawfully carry out their duties. An elder law attorney may be able to advise on such matters.

Source: Naples Daily News, "Issues for Elders: Successor trustees need to understand their role," Jill Burzynski, Aug. 29, 2017

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