What is a successor trust?

What is a successor trust?

What is a Successor Trustee? A Successor Trustee is the person responsible for administering the trust after its Grantor either passes away or becomes “Incapacitated” – that is, unable to administer the trust for themselves.

What is a creator of a trust called?

The person who creates and funds a trust is referred to as the Grantor. A grantor may maintain control over the assets in a living trust and may continue to make changes to the trust assets as well as to the beneficiaries.

What rights does a successor trustee have?

The Successor Trustee must act with the Trust’s beneficiaries in mind, and cannot make decisions for their own benefit (unless specified in the Trust). The Successor Trustee must then distribute property and assets to the correct beneficiaries, and ultimately close the Trust when specified.

What is the difference between a trustee and trustor?

The trustor/grantor/settlor is the person who creates the trust. The trustee is the person who manages the assets in the trust.

Can a successor trustee change a living trust?

Can a successor trustee change a trust? Generally, no. Most living or revocable trusts become irrevocable upon the death of the trust’s maker or makers. This means that the trust cannot be altered in any way once the successor trustee takes over management of it.

How many settlers can a trust have?

Yes, the Settlor of a trust can also be a trustee. A trust may also hold more than one settlor and added than one trustee. This is a joint arrangement, for instance, when married couples own a trust collectively.

Can a creator of a trust be a beneficiary?

The founder is the person who sets up the trust. The founder of a trust may also be a trustee and/or a beneficiary of a trust. However, the founder is not permitted to be the only trustee of a trust, because a trust is a contract and a person cannot contract with him- or herself.

Is trust income taxable to the beneficiaries?

When trust beneficiaries receive distributions from the trust’s principal balance, they do not have to pay taxes on the distribution. The trust must pay taxes on any interest income it holds and does not distribute past year-end. Interest income the trust distributes is taxable to the beneficiary who receives it.