Successor Trustees

 Allan and Barry Client were twin brothers who lived in Ventura. Longtime business partners, they sold their manufacturing company, cashed out and retired by the time they were in their late sixties. Neither had ever married, and neither had children. When they were 70, each did his estate planning. Each was the Successor Trustee and major beneficiary of the other’s Trust.
Then, while no one was looking, they got older. Much older. When they were 88, Allan became bedridden after he fell and broke his hip. Then his memory became less reliable. Barry took care of Allen, handled his checkbook and prepared his tax returns. He was more robust than Allan, and his mind remained sharp.
Two days after their 91st birthday, strong, capable Barry died of a heart attack. Allan was shocked. Worse, Allan was simply not equipped to take responsibility for his own finances, let alone deal with Barry’s Trust estate and some non-trust assets that Barry had neglected to hold as Trustee of his Trust.
A cursory review of the brothers’ trusts revealed that Allen had neglected to name any Successor Trustee but Barry. Barry’s Trust had named a second Successor Trustee after Allen: an 80-something cousin in New Jersey who by now was suffering from early-onset dementia.
What can we learn from this sad scenario?
• It’s a good idea to name several back-up Successor Trustees. If “A” or “B” can’t serve, perhaps “C” is available.
• If you don’t have enough qualified family or friends to name as potential Successor Trustees, consider giving someone the power to appoint a Successor Trustee, even if he or she cannot personally serve.
• Consider nominating a corporate Trustee, if the Trust Estate is of sufficient size. Although corporate fiduciaries may be unfamiliar with the particular Trustor/Beneficiary, they can provide a level of expertise and experience that the individual trustee may lack, and may further have a ready-made business structure suitable for handling the Trust’s assets and liabilities.
It’s not a perfect world. Not everyone has a good, long list of available Trustee talent. That said, we are all well advised to identify and nominate enough backup candidates to guard against coming up short as Allan and Barry did. This subject should be discussed with a qualified attorney.
Jerry Kessler practices law in Santa Clarita. He can be reached at 661-255-1001.