Articles

The Importance Of A Successor Trustee

Karen Prinz, Vice President, Private Banker-Trust, First Foundation Bank

April 20, 2010

The value of a successor trustee should never be downplayed as an integral part of any estate plan. One of the biggest mistakes people make is to neglect to plan for a situation where someone is needed to take over financial affairs in the event of death or incapacity. While these unexpected events create great sorrow and tragedy for families, proper planning allows for critical undertaking to give peace of mind. The right trustee can guard against beneficiaries being taken advantage of when they are most vulnerable.

Simply naming a successor can be even more beneficial when a corporate entity is chosen rather than an individual. With professional resources and reliability a corporate trustee's value can be immeasurable when it comes to working through life changing events. Knowledge of tax & estate laws and other financial matters are some of the crucial benefits that come with expert their experience. The fear that a corporate trustee would be too cold a shoulder to lean on may be a concern for some, though through working closely with clients they often come to see us as empathetic and an advocate with their families' best interest at heart.

Past experiences with clients are strong reminders of just how important the successor trustee decision is. Recently, I had a client who lost his wife after a long illness. She managed the financial affairs for the family so he was at a loss. He was in poor health and overwhelmed. His brother lived out of state and the caregiver he was using had befriended him and was trying to talk him into transferring his home into her name. In working with him, I was able to consolidate his 22 bank accounts, assist in the funding of the various trusts and safeguard his assets. No one was able to take advantage of him.

In another situation a young adult client inherited his mother's trust after she died unexpectedly. With no family, the mother named First Foundation as successor trustee to help manage a trust that the son would not take full control of until he reached the age of 30. Handling major affairs such as selling the family house, paying for education expenses and scheduling meetings to inform the client on his financial affairs were some of the key responsibilities involved. But beyond financial duties, I believe our ability to serve as a sturdy guide throughout the ordeal was our greatest role.

« Back to Article Index