Trustees
Nomination of Trustees
Trustee’s Power and Duties
In plain words this section of the living trust can be described as a guidebook for the successor trustee, that becomes active as soon as the grantor dies.
Although during lifetime the grantor is mostly identical with the trustee of a living trust, he is not bound by the management restrictions set forth in this section. We have learned above that until the grantor dies or becomes incapacitated, he alone has the right to revoke or amend the trust. Therefore he’s not bound by his own rules as long as the living trust is revocable.
Nomination of Trustees
A very important point in this section is the nomination of one or more successor trustees. The successor trustee is the person who will be in charge of the trust once the grantor dies or becomes incapacitated. In addition alternative trustees are nominated here. Alternative trustees step into the footsteps of the original trustee in case that he will become unavailable after the trust is set up.
An estate planning lawyer may include other items within this section. That could be a regulation regarding the resignation of the trustee or the appointment of new successor trustees for the case that the main trustee and all alternative trustees become unavailable for whatever reason. Sometimes a bond waiver is included as well. Other subjects here include the compensation of the trustee and his liability for serious cases of misconduct.
Trustee’s Power and Duties
This subsection deals with the specific powers and duties of a trustee. Usually it starts with a general clause that confers all necessary authorities and powers to the trustee as far as the respective state laws allow. The empowerment is generally subject to the trustee’s fiduciary duty to the grantor and the beneficiaries.
Besides the general clause, normally the powers of the trustee are further specified here. That does not mean that the powers of the trustee are restricted to those specified points. The trustees powers regularly include:
Trustee’s Power and Duties
In plain words this section of the living trust can be described as a guidebook for the successor trustee, that becomes active as soon as the grantor dies.
Although during lifetime the grantor is mostly identical with the trustee of a living trust, he is not bound by the management restrictions set forth in this section. We have learned above that until the grantor dies or becomes incapacitated, he alone has the right to revoke or amend the trust. Therefore he’s not bound by his own rules as long as the living trust is revocable.
Nomination of Trustees
A very important point in this section is the nomination of one or more successor trustees. The successor trustee is the person who will be in charge of the trust once the grantor dies or becomes incapacitated. In addition alternative trustees are nominated here. Alternative trustees step into the footsteps of the original trustee in case that he will become unavailable after the trust is set up.
An estate planning lawyer may include other items within this section. That could be a regulation regarding the resignation of the trustee or the appointment of new successor trustees for the case that the main trustee and all alternative trustees become unavailable for whatever reason. Sometimes a bond waiver is included as well. Other subjects here include the compensation of the trustee and his liability for serious cases of misconduct.
Trustee’s Power and Duties
This subsection deals with the specific powers and duties of a trustee. Usually it starts with a general clause that confers all necessary authorities and powers to the trustee as far as the respective state laws allow. The empowerment is generally subject to the trustee’s fiduciary duty to the grantor and the beneficiaries.
Besides the general clause, normally the powers of the trustee are further specified here. That does not mean that the powers of the trustee are restricted to those specified points. The trustees powers regularly include:
- The power to pay the grantor’s debts and taxes
- The power to sell or encumber trust property
- The power to manage the trust’s real estate (e.g. to lease the trust property)
- The power to invest trust property in property of any kind and the power to choose the kind of diversification of the trust assets
- The power to receive any additional property for the trust
- The power to employ consultants (e.g. lawyers and accountants) and pay the respective (reasonable) fees, including the power to institute or defend legal actions regarding the trust
- The power to deposit trust funds into bank accounts (sometimes even if not covered by the FDIC) and to enter the necessary agreements with the respective institutions (e.g. signing up for online banking)
- The power to continue any business of the grantor
