In a Daily Republic article, “Amending trust easier if parents can make informed decision,” a son asked an estate planning attorney about his aging parents, who are now in a nursing home, and had concerns about the family's trust. As the power of attorney agent and trustee, will he be personally liable if someone sues? Does he have the ability to handle his parent's finances in the trust with a power of attorney? Read below as we break down these issues in our blog.
Can There Be More Than One Successor Trustee?
If your parents have a revocable or living trust, they can create provisions allowing one or more individuals to become the successor trustees, in the event either parent becomes incapacitated or dies. If both parents pass away, the son would become the trustee.
What Powers Does a Successor Trustee Have?
When an estate plan is created, a power of attorney is also created so that someone can take control of the finances. If a trust has these provisions, the successor trustee may already be legally positioned to act on a parent's behalf.
The trust should also have a provision that explains whether the successor trustee is empowered to sell any real estate. Trusts can be drafted in any way a client wants it to be written, so a successor trustee only receives the powers that are granted through the document.
Can the Terms of the Trust Be Changed by a Successor Trustee?
In general, a successor trustee cannot change the terms of the trust while the original trustee or the creator is still competent and alive. Once the original trustee passes away, the successor trustee must administer the trust according to its terms. If the successor trustee alters the terms, modify beneficiaries, or deviate from its instructions, this can give rise to family disputes.
Is the Trustee Liable for Real Estate in the Trust?
The trustee is not liable to a buyer during the sale of property. There are exceptions, so it's recommended that you speak with an estate planning attorney to help with the sale.
What If There Is No Successor Trustee Named?
If parents did not name the son as a successor trustee and does not give him power of attorney, are the parents mentally competent to make decisions about these documents?
Due to the age of the parents, an attorney may be concerned about the competency and whether the son might be exercising improper influence by pressuring them to turn over their assets.
To avoid potential issues, parents and the son should meet with an estate planning attorney to determine their capacity and wishes. If the parents are found to not be competent, the son may need to become their conservator through a court hearing.
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