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No trustee named on trust… how to fix that….

There are many instances where a California trust ends up without a trustee in charge.  When I do estate planning I try to come up with a number of back-up choices and thus this doesn’t happen for clients when I do the estate plan. However, not everybody comes to me for their planning. Some only come to clean up messes created elsewhere.  The lack of a trustee is one of those messes. There are many reasons a trust can be without a trustee. Among those:

A person has died;

A person is sick or unable to act;

A person doesn’t want to act as trustee;

Any of 100 other reasons….

So, let’s say mom has died and has a trust that names daughter #1 as trustee and no back up. I have met with clients like that.  I advise them to put in a back up and they say they don’t need to because daughter #1 will do it. I go through the list of reasons that daughter #1 might not be able to act and usually I can get them to put a back up; another family member, a friend, a professional fiduciary, a professional (CPA or attorney), or a bank or other financial institution. There are many good options. In fact, I encourage people to put several options.

However, not all attorneys do this. Some accept mom’s idea and just have daughter #1 as successor trustee. Of course, daughter #1 has died or in some other way is unable to act and that’s when I am brought in… to CLEAN UP THE MESS.

Unfortunately, in many cases this involves going to probate Court and getting a Court order appointing a successor trustee. In some cases the beneficiaries are vote on a trustee but often the beneficiaries are minors or they don’t get along. Thus we end up going to probate Court.  The key here is planning ahead to avoid this problem!

Hopefully you are reading this during the planning process when the successor trustee situation can be properly addressed. If not, and death or disability have created a mess, contact me and I will fix it for you!

-John

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10.0John Bernard Palley
Wealth Counsel Member
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