By Steven J. Gibbs, Esq.
Hello Friends & Colleagues!
This week’s topic was inspired by actual events. A client recently asked me in an initial consultation what exactly is a successor trustee? It reminded me that the concept of successors in estate planning is about as foreign and confusing as the other legal mumbo jumbo that goes with the territory. More important, appointing successors haphazardly and without careful thought can lead to unnecessary conflict for loved ones. This, of course, does not contribute to your anyone’s health and wellness.
Thus, in my relentless pursuit of providing educational empowerment for seniors, I will dive in and explain this concept and delve into these issues. You need to know that successors must be appointed and, more importantly, that there is a way to appoint successors that maximizes the effectiveness of the estate plan and minimizes potential conflicts.
A key component of any estate plan is the successful placement of “successors” who are to take charge of various duties in the event the primary person is unable to continue. These various roles include the successor trustee, successor power of attorney, successor healthcare surrogate, and the successor personal representative (aka executor). Depending upon the estate, a guardian (or successor guardian) may also be appointed.
A successor for any of the above roles is essentially the person who steps in for the original party.
For example, the successor to the trustee is defined as the successor trustee. To put this in context, when someone establishes a revocable living trust (defined as the settlor), they generally appoint an initial trustee and this appointee is often themselves. In the case of a joint trust, the initial trustee would be a dual role as co-trustees. When a settlor can no longer manage the affairs of the trust, the successor is designated to step and an manage the trust assets on behalf of the settlor while living. Upon the settlor’s death, the successor is designated to administer the trust by distributing income and assets pursuant to the terms of the trust.
In the same way that a successor trustee manages the affairs of the trust, a successor power of attorney would manage business affairs as designated in that document and so forth for the healthcare surrogate, personal representative and guardian.
Estate successors must be designated skillfully so as to maximize competency and harmony and minimize the likelihood of conflicts.
By the example above, it is hopefully clear that the person or persons whom are appointed as successors serve in a very important role. In fact, it can make the difference between a harmonious estate and an estate riddled with conflict. I have often unfortunately observed that a parent will appoint a favorite son or daughter to serve in various roles and essentially preside over the remaining siblings. Although this approach may have made sense to the parent, such designations can naturally lead to strife. In the world of estate planning, strife is bad because it can lead to sibling rivalry and even theft from the estate or other forms of drama.
Often times, it can be effective to appoint multiple siblings to serve as co-fiduciaries in various roles OR it may be advisable to mix up the appointments so that, for example, one sibling may serve as successor power of attorney and another as the healthcare surrogate. It is often the case, that one sibling may be more suited than another for business decisions and another more suited for medical decisions, etc.
An important determining factor is the relationship between siblings and if applicable other appointees. If relationships are currently strained, they may become more contentious in the event of a death. If one appointee is really ideal, then the key question is whether they will be able to bring people together or on the other hand will they foster conflict.
All of these questions are very specific given the family relationships and goals of the estate plan and thus must be carefully considered in every case.
As always, I hope this is helpful and…
Until next time.
Steven Gibbs founded the Gibbs Law Office in January 2009, committed to providing client-centered legal services.
Steve as he would rather be called, is not your typical attorney. If you appreciate the staunch egotistical mannerism of most firms, you will be delighted with Steve’s unpretentious approach to educating and then assisting his client. Instead of giving you his complacent and lofty ideas, he would rather pursue your expectations with professional conversation about resolving your concerns under the Law. It’s your life and it’s his job to make your legal expectations come true while using years of his guidance and knowledge.
Steve was admitted to the Minnesota Bar in 1999, the Florida Bar in 2007 and was recently admitted to the California bar. Keeping abreast of law changes in these three States, as well as the United States, assists him in all aspects of the types of law the firm practices.
Along his career path, he was an associate attorney for an insurance defense law firm; an in-house real estate negotiator for Target Corporation; and corporate counsel for Civix, LLC and Vice President for North American Properties where he was responsible for various real estate transactions, including legal issues and negotiating unresolved business issues. Prior to opening Gibbs Law Office, PLLC, he was an associate with the firm of Roberts & Engvalson, P.A. where he gained his knowledge of trusts, estate planing and Wills. He opened his own firm in 2008 and now focuses on laws that will enrich the needs of his clients throughout their lives and those of their children. The firm has developed a practice dealing only with Trusts and Estate Planning, Wills, Medicaid Planning, Elder Law, Real Estate, Business Law and Probate.
Quoting from Steve “I decided to practice in areas that families will need as they progress down life’s path. To help them with a solid foundation that will carry them throughout there lives is a rewarding experience for me and my staff.”
www.gibbslawfl.com . email@example.com