TO ANSWER the recurring question that I receive, let us scrutinize the parties involved in a living trust.
The Grantor (also called settlor, trustor, creator or trustmaker) is the person whose trust it is. Married couples who set up one trust together are co-grantors of their trust. Only the Grantor can make changes to his or her trust.
The Trustee manages the assets that are in the trust. Many people choose to be their own trustee and continue to manage their affairs for as long as they are able. Married couples are often Co-trustees, so that when one dies or becomes incapacitated, the surviving spouse can continue to handle their finances with no other actions or steps required, including court interference.
Many people believe that when they transfer assets to the living trust, they lose control over the assets. That is absolutely not true. As the Trustee of the trust, the Grantor manages his or her trust assets for his or her own benefit during his or her lifetime. He or she continues to use trust assets in the same prior to creating the trust.
When the Grantor is no longer able to serve as Trustee, whether because of death, incapacity, or illness, the successor trustee named in the trust agreement takes over the management of the living trust. The Successor Trustee has the same powers, rights, duties and responsibilities as the original trustee. The Successor Trustee steps into the shoes of the original trustee. Court approval is not required for the successor trustee to begin acting.
While the Successor Trustee has all the powers, rights, duties, and responsibilities as the original Trustee, the Successor Trustee has no authority to alter, amend, or revoke the living trust. His or her role is limited to managing assets and distributing the trust assets to the beneficiaries in accordance with the desires of the Grantor as set forth in the living trust agreement.
The most important thing to remember when a Successor Trustee steps in is that these are not his or her assets. His or her role is to safeguard them for others: for the Grantor (if living) and for the Beneficiaries, who will receive them after the grantor dies.
Can the Successor Trustee access confidential property information, such as getting a copy of bank statement or property appraisal or equity assessing on a house, while the trustee is managing the trust?
No. At least not at this time. A Successor Trustee is much like a stand-in for a Broadway musical. The stand-in doesn’t go on stage and start singing until such time as the original player is unable to do so. Until then, the stand-in has no role to play. A Successor Trustee has no “role to play” in the trust unless and until the original trustee can no longer perform his duties. At that point, “It’s showtime!”
On the receiving end, the Beneficiaries are the heirs that will benefit from the Trust once the Grantor have passed away.
Minor children who are beneficiaries of a trust will normally require a guardian to watch over their financial interests. Financial institutions will not pay benefits directly to minors or give them access to investment accounts. State laws generally require that a guardianship be appointed to oversee the personal affairs of minors until they reach the age of majority, typically age 18.
* * *
Evangeline is a California registered tax preparer, a legal document assistant for the general public, and a freelance paralegal offering assistance to various attorneys. She can be reached at her office at 2451 Colorado Blvd. #2, Eagle Rock, CA 90041 or at her marketing location inside the Eagle Rock Plaza. Her phone number is (323) 550-1869 or you can check her website at: www.evangelinegiron.net. She is a member of the court-endorsed California Association of Legal Document Assistant (CALDA) and an Associate Member (Non-attorney) of the LA County Bar Association (LACBA).
* * *
Note: Evangeline is not an attorney nor does she provide legal advice. She is a bonded and registered Legal Document Assistant and prepares legal documents per the specific direction of clients.
| < Prev | Next > |
|---|
