The person who creates and funds the trust is called the “Settlor” or “Grantor”. If you are the person creating the trust, then you should understand why a trust is suitable for your needs. What are your reasons for creating the trust and what are your goals in having the trust in place and funded? Make sure that the person drafting the trust understands and documents your intent before putting pen to paper. Is a trust the best vehicle to accomplish your goals?
Perhaps you, in your capacity as Settlor/Grantor, will be the initial trustee and the person responsible for managing the trust once it is created and funded, but choosing the Successor Trustee is extremely important. You should understand that there are various types of trustees –individual trustees, corporate trustees, private trust companies and some combination of these entities. There are benefits and costs and risks associated with each option and you, in your capacity as the Settlor/Grantor, need to understand these benefits, costs and risks.
Assuming you name an individual to take over as Successor Trustee when you can no longer serve in that capacity, whether due to illness or death, it is extremely important for you to meet with that individual and explain to him or her the duties and powers associated with the role of Successor Trustee. This is very important because the Successor Trustee needs to understand the responsibilities involved before agreeing to serve.
And assuming your chosen Successor Trustee agrees to serve, then a plan should be developed for investing the assets in the trust and taking care of the financial obligations to the beneficiaries of the trust, including but not limited to the Settlor/Grantor. This can be discussed while you are still serving as Trustee or after the Successor Trustee takes over.
I am an estate planning and estate litigation attorney who has been practicing law for many years. Based in Bethesda, Maryland, I work with clients in Montgomery County and throughout Maryland, the District of Columbia, and Virginia. My practice focus is 1) estate planning (wills, trusts and ancillary documents), 2) probate (the publication and effectuation of a Will through the local court) and 3… Read More
By Ilyce Glink and Samuel J. Tamkin Feb. 19, 2020 at 6:00 a.m. EST Q: I just read your column giving suggestions to an elderly mother who wanted to make sure her daughter received her home at death without probate. I’m a retired attorney, and I don’t know how many times I was asked the same question by clients over the years. There’s one thing that you didn’… Read More