What Is a Successor Trustee?
Do you know what to do after learning you are nominated as successor trustee of the person creating a trust?
What are your duties?
After the death or incapacity, the Successor Trustee is legally responsible to manage and distribute the assets according to the trust provisions. NRS 164.710. Some important tips to remember:
- You cannot mix trust assets with your own. You must keep separate checking accounts and investments.
- You cannot use trust assets for your own benefit (unless the trust authorizes it).
- You must treat trust beneficiaries the same; you cannot favor one over another (unless the trust says you can).
- Trust assets must be invested in a prudent (conservative) manner, in a way that will result in reasonable growth with minimum risk.
- You are responsible for keeping accurate records, filing tax returns and reporting to the beneficiaries as the trust requires.
Do you have potential liability?
YES. As successor trustee you have many fiduciary duties including the duty to act in the best interests of the beneficiaries. These responsibilities are fraught with possible dangers but there is an easy solution.
Where do you start?
There are many things that can be done to ensure proper administration. Fortunately, working with Drizin Law for trust administration is a straightforward process that will provide great peace of mind throughout the administration.
Important Steps we can take to protect the Successor Trustee:
- Certificate of Incumbency. This document indicates that you have assumed the role as Successor Trustee and will be recorded with the Clark County Recorder’s Office.
- Notice of Death. After the death of the settlor, we publish a notice which indicates the death of the settlor and advises creditors that they must file any claim with the Successor Trustee within 90 days of the publication. Copies are also mailed to any known creditors. If the creditors do not file a claim with the Successor Trustee within 90 days, their claim is forever barred. NRS 164.025.
- Notice of Irrevocability. We will send a notice to the beneficiaries heirs and interested parties that the trust has become irrevocable as a result of the death of the settlor. No person upon whom notice is served may bring an action to contest the validity of the trust more than 120 days from the date the notice is served upon them. NRS 164.021.
- Notice of Proposed Action. NRS 164.725. We may send a notice to every adult beneficiary describing a proposed action and explain the reason for taking the action. If the beneficiaries fail to object, the trustee is not liable to any present or future beneficiary with respect to that proposed action. In the event of an objection, we would file a petition with the Court and, if approved, the trustee would have no liability to any beneficiary for the action taken.