ESTATE PLANNING: Assuming your position as trustee

Q: I am named the successor trustee of my mother's trust. When the time comes, how do I prove to the banks that I am the new trustee? 

A: It will depend on the circumstances. Generally speaking, a named successor trustee can become the duly appointed and acting trustee under one of three conditions. Actually there are a bunch more, but these are the three most common.

The first is that the grantor makes the successor trustee the current trustee or co-trustee. Some of you might think that would never happen. The truth is it happens more than you think.

Sometimes a grantor needs help with their financial affairs or simply doesn't want to "mess with it" anymore. If the grantor, who is also the original trustee, simply wants to turn over control to the successor trustee, he or she can do this by resigning as trustee and allowing the successor trustee to become the trustee or by amending the trust agreement and making the successor trustee the new trustee.

Another common way a successor trustee becomes the trustee occurs when the grantor and original trustee becomes ill or incapacitated in some way. Believe it or not, you are more likely to become incapacitated than you are to die. 

If you can no longer serve as trustee because of an illness, your successor trustee can step into your shoes. The process to establish that the trustee can no longer serve is likely set out in the trust agreement. However, most likely it will involve getting a letter from the grantor's physician stating they can no longer handle their affairs. Once you have the letter, the successor trustee can sign an acceptance and oath and begin serving as trustee. You will likely also need to supply the bank with a copy of the letter.

The third most common way that a successor trustee becomes trustee is when the grantor and original trustee dies. When the grantor has passed away, the successor trustee can step into his or her shoes and begin administering the trust.

The process usually involves signing an affidavit or certificate of trust stating that the grantor and original trustee has passed away and that the successor trustee is now the duly appointed and acting trustee. The trustee will should also sign an oath and acceptance and a death certificate is also usually also required to establish the passing. 

The exact process may differ slightly from bank to bank. Also, a bank may have its own form or process before it will recognize the new trustee. Remember, a bank is assuming a lot of risk when it deals with a successor trustee so they may need to be convinced.

Opinions are solely the writer's. Christopher W. Yugo is a Crown Point attorney. Address questions to Yugo in care of The Times, 601 W. 45th Ave., Munster, IN, 46321 or to chrisyugolaw@gmail.com. Yugo’s information is meant to be general in nature. Specific legal, tax, or insurance questions should be referred to your attorney, accountant or estate-planning specialist.