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Choosing a successor trustee

D. Michael O'Connor

Posted on February 16, 2022

D. Michael O'Connor is President of MassMutual Trust Company.
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Over your lifetime, you’ve saved and invested wisely. Thanks to your diligence, you’re able to enjoy a comfortable lifestyle today, but you also want to ensure that the wealth you’ve created can help provide for the people and causes you care about tomorrow.

A trust can help

Created by executing a document known as a “trust agreement,” a trust is a legal entity that can hold property for the benefit of a third party. As the creator or “grantor” of the trust, you can name yourself as the “trustee” — the person responsible for overseeing the management and administration of the trust’s assets — or you can name another party to assume these responsibilities. (Related: Setting up a trust, what you need to know)

With the help of a trust, you can benefit from the income generated from the assets held in the trust over your lifetime, and upon your passing, the trust assets bypass probate and will be distributed to your beneficiaries according to your wishes.

But as the sole trustee of your trust, what would happen if you were to become incapacitated and you could no longer manage the trust? Furthermore, who will administer the trust if and when you were to pass away?

The importance of a successor trustee

One of the most important decisions you can make when considering your estate plan is deciding who is going to serve as your successor trustee; the person or entity that will step in and help manage the trust’s assets when you no longer can, while also ensuring a successful transfer of that wealth, possibly for generations to come.

When deciding on a successor trustee, you may choose to name a trusted family member or friend, or you could choose to name a corporate trustee.

Considerations when choosing an individual

While a family member or friend could competently serve as your successor, there are some important things to consider when choosing an individual as successor trustee.

  • First of all, a family member or friend will likely have a close relationship with you, and possibly with your beneficiaries. Will that person be able to remain objective in their handling of the trust given the personal relationships that may exist? Could there be potential conflicts of interest? Before finalizing your decision, you’ll want to think through family relationships, and dynamics, and how those relationships could impact the smooth transition of your wealth.
  • Secondly, will your chosen successor have the time required to administer the trust as well as the experience to handle the fiduciary responsibilities of a trustee?
  • Furthermore, if the person named as the successor is inexperienced in trust administration and needs to hire professionals such as an accountant, investment advisor, or an attorney for guidance, the costs could grow substantially.
  • Consider, as well, the issue of continuity. When naming an individual as a successor trustee, administrative services could be interrupted in the event of the successor’s illness, death or incapacitation.

Consider a corporate trustee

When choosing a professional corporate trustee as your successor, many of the concerns mentioned above could be eliminated. For example, many corporate trustees offer access to a wide array of experienced professionals versed in areas such as investment management, fiduciary oversight, and trust administration services which are all available for a single, all-inclusive fee.

As well, concerns of continuity and impartiality in administering the trust are largely eliminated when engaging with a professional trustee, so you can enjoy peace of mind knowing that the trust assets will be managed objectively, and according to your wishes.

Lastly, given their experience in working with trusts, grantors, and trust beneficiaries, a corporate successor trustee may have an edge over an individual in their ability to communicate with beneficiaries on a regular and timely basis, and to effectively answer their questions knowledgably, impartially, and with sensitivity.

According to Elithea Mas, chief fiduciary officer at the MassMutual Trust Company: “Naming an individual as a successor trustee is often the trust grantor’s first thought. Once they have a discussion with their financial professional or estate planning attorney, however, many come to realize that naming a family member or friend will place a tremendous amount of responsibility on that person that they may not be equipped to handle.”

“Choosing a corporate trustee ensures that an experienced and knowledgeable team of professionals will step in to administer the trust, thereby relieving a family member of the responsibility at a time when they may be grieving the loss of their loved one. If someone feels very strongly about keeping a family member involved, however, they could name both a family member and a corporate trustee as successor co-trustees.”

Obviously, the decision to name a trusted individual or a professional trustee to serve as your successor is a deeply personal decision that should be made after careful consideration of your unique circumstances, feelings, and needs.

To learn more about a professional successor trustee relationship, contact your MassMutual financial professional or the MassMutual Trust Company directly at 1-888-894-5354 or via email at Together, your financial professional and MassMutual Trust can help you determine if a corporate successor trustee may be right to help you achieve the wealth transition goals you have for your family.

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The MassMutual Trust Company, FSB is a federal savings bank and is a wholly owned subsidiary of Massachusetts Mutual Life Insurance Company. 

The information provided is not written or intended as specific tax or legal advice. MassMutual, its employees and representatives are not authorized to give tax or legal advice. You are encouraged to seek advice from your own tax or legal counsel. Opinions expressed by those interviewed are their own and do not necessarily represent the views of Massachusetts Mutual Life Insurance Company.