Choosing a Successor in Estate Planning

Estate Plans include a variety of documents which together identify your assets and who gets them when you pass away. These most commonly are: (1) Living Trust; (2) Pour-Over Will; (3) Power of Attorney; and (4) Advanced Health Care Directive. But a critical issue in each is deciding on who gets to manage those assets.

While generally you continue managing your assets just as you did before creating your Estate Plans, one of your most important and often difficult decisions is who you want to succeed you in managing these assets when you are unable to do so either due to incapacity or death. This person is called a Successor Trustee in Trusts; Executor in Wills; and , Agent or Attorney-in-Fact for Powers of Attorney and Health Care Directives.
1. Spouses Generally Choose Each Other: Married couples typically designate that each can make the decisions for the other just as they likely do in all life decisions affecting their mutual interests. This may also apply to unmarried couples with lasting relationships. But who makes the decisions, when the couple cannot?

2. Children? After the spouses, most but not all people look to their children to make these important decision for them. After all, the children may be the ultimate beneficiaries and may also have the greatest interest in protecting their parents. But, as much as you love your children and would like to think they will be caring and unselfish when you’re not there to referee, you can’t know for sure. All too often children waste their parent’s estate on attorney fees battling one another in Probate Court. Ask yourself the following questions before naming a child to be your Successor decision maker:

(1) Are They Financially Responsible? Generally, a successor Trustee is not required to be bonded and while there are legal remedies to the mismanagement of Trust funds, sometimes you cannot recover money that has been wasted. It’s critical therefore, that your successor Trustee(s) are financially responsible. A clear indication is how they manage their own finances. Do they pay their bills on time? Have they filed for bankruptcy before? Do they save money?

(2) Are They in Good Physical Health? Your successor Trustee will act after you are gone. This means they need to outlive you. Selecting a successor Trustee who is in poor physical condition, with health problems can be an unreliable choice. Your Agent for Health Care and Attorney-in-Fact will need to take care of you during your lifetime if you cannot do so on your own. If they don’t take care of themselves physically, how can they take care of you?

(3) Are They Honest? When it comes to money, can they be trusted? Are they honest? Can they put themselves second? When naming a successor Trustee or Attorney-in-Fact, you are creating a fiduciary duty that requires the Trustee to act selflessly. If you have ever questioned their honesty, don’t test it by giving them the chance to let the family down after you’re gone.

(4) Are They Willing? Your Trustee must be willing to act. This means you need to first ask them if they want the responsibility. Acting as successor Trustee is a thankless job, it requires someone’s time and energy. It can involve pressures from other family members that may harm family relationships. Discuss these issues with your successor Trustee(s) before naming them.

(5) Are They Able? Acting as successor can feel like a full-time job. It’s important that your successor Trustees have the ability to understand and perform the required duties of that job. For example: If the homeowner’s insurance policy lapses, and the house burns down, your Trustee may be personally liable.Keep in mind that the successor Trustee will be taking on all of the Trust duties you carried out, and will need to balance those in their day-to-day routine. Can they manage?

(6) Are They Available? In this increasingly mobile world, it is not unusual for family members to be spread far apart geographically. Many decisions include a degree of urgency… such as what should be done in a medical emergency. Can they get there in time to meet with your doctors and other professionals?

There is no single right or wrong answer to these questions. It depends upon trust and a hope that when needed, your children will be there. Often, more than one child is chosen as decision maker, such as Co-Trustees making decisions together. Other times, you might go outside the family and perhaps choose a brother or sister, or relatives, or trusted friends. For all of these choices, the questions above should be asked.

3. Professional Management – the Private Fiduciary: When your family or friends is not the right choice, or you don’t have family or friends to choose, then a Licensed Private Fiduciary is a good alternative. For a number of people, especially those with substantial and complex assets, hiring a professional may be the preferred solution. Private Fiduciaries are persons licensed by the State of California to provide financial management services as conservators, guardians, trustees, and agents under durable power of attorney. They are regulated by the Department of Consumer Affairs, Professional Fiduciaries Bureau. Before being licensed, they must demonstrate through education, experience, and testing that they are qualified to provide necessary financial management services to the public, particularly provide critical services to seniors, persons with disabilities, and children.

At BPE Law Group, P.C. we advise and assist our clients with all of their Estate Planning needs and in choosing the best solution for designating Successor Trustees, Executors, and Agents. This is a core part of our law practice and is the “E” in BPE Law. If you have any estate planning needs or have questions about your existing estate plans, please contact me at or call our office at (916) 966-2260 to arrange a consultation.

This article is not intended to be legal advice, and should not be taken as legal advice. Every case requires review of specific facts and history, and a formal agreement for service. Please feel free to contact us if you need legal advice and are interested in seeing if we can help you