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hey there i'm a state planning attorney paul ramilah and in this video we're going to talk about the common but sometimes complicated trustee succession designations in a trust all right there are some trusts that go on for many many decades i'm going to give you a couple of exam of examples of those in a minute so when someone sets up a trust that's going to go on for many years decades or even longer there's some provisions that become really important in that trust provisions like who's going to be the trustee who's going to be the alternate trustee who's going to be the alternate after that is there going to be co-trustees if so what are their powers um how does a trustee get removed what if there's a vacancy in the office of the trustee all these things become real important it can seem overwhelming let me give you a couple of examples and and then we'll apply what the what the decisions typically are all right so a couple of circumstances where trust may go on for many many years decades let's say you have um some some parents of minor children and the parents bought a couple of million dollars of life insurance they want to provide for their children should the parents pass away their children are small maybe ten eight and six and the parents set things up so if the parents pass away all that life insurance money goes into a trust for the children instead of being dumped into their lap when they're 18 or maybe a grandfather has a grandson and he wants to establish a trust for his grandson he may be thinking something like you know what this grandson of mine he's the apple of my eye he goes fishing with me i want my grandson to have opportunities that i didn't have so i'm going to leave him x dollars or a percentage of my estate and let's say that turns out to be 750 000 but grandpa grandfather is thinking one thing and one thing only i am not going to let my you know grandson get that in one big chunk i'm going to insist that um that he you know he work and go to college and that he get a job and he not be spoiled i want to make sure he doesn't spend this money on things that he shouldn't be spending it on and i certainly don't want to dump a bunch of money in his lap where he may get into a drug problem or alcohol problem and then and then what i try to do to help him i ruined his life that's not gonna happen so the grandfather says i'm gonna i'm gonna leave this or i'm gonna give this i'm gonna leave it when i pass away and a trust for my grandson when the grandfather does that he's got some decisions to make decisions like how long will this trust last and the grandfather saying i got no idea how my grandson's going to turn out he's a great kid he's but he's 10 years old a lot can happen i don't know who he's going to hang out with i don't you know he could make some bad decisions so i want this trust really to last for my grandson's lifetime that well that means the trust could last he's 10 so the trust could last for 70 or 80 years maybe even more but so he makes that decision to make this trust last for the grandson's lifetime another decision the grandfather may make is i want trust principle i want the trustee of the trust to have the discretion to give principle two or four my grandsons health education maintenance or support the typical hem standard hems health education maintenance or support i've talked a lot in other videos about this hymns standard and that's very common so those are some of the decisions the grandfather has to make but he's got to make some other decisions and this is where it can get a little bit tricky and a little bit complicated and we want to make sure grandpa doesn't get overwhelmed when he's making these decisions so we gotta say all right grandpa we gotta make decisions about trustee and successor trustees so one of the first decisions is should grandpa name a corporate trustee or should he name an individual trustee well i was talking last week to someone who worked for a corporate trustee and this person told me paul paul i i work for a corporate trustee and i'm just letting you know that the corporate trustee that i work for they will not accept the position as trustee if they're designated in a trust unless the trust has at least 10 million dollars of investable assets well this is going to be let's call it 750 000 so that takes the whole corporate trustee out of the equation now if there's a corporate trustee out there watching this video and you accept positions of of trustee when a trust has investor investable assets of maybe 500 000 or 750 thousand dollars put something in the comments below but i think i'm going to hear crickets so corporate trustee out of the question individual trustee who should that individual trustee grandpa may say you know what my nephew he'd be perfect he you know he has a good relationship with my grandson when i die and leave this to my grandson i want my nephew to be the trustee and so grandfather might be asked what if what if nephew can't do it well then i want my niece to do it what if niece can't do it i want my second cousin to do it so maybe somebody names a backup and then a backup to the backup and you know goes on from there now here's some other questions sometimes grandpa may want co-trustees he might be thinking to himself i don't want uh one person to have the pressure of making these determinations of when my grandson can have money i want three people to do it so when there's co-trustees grandpa has to decide you know if they need to do something can they act by a majority two out of the three are necessary to take for the trustees to take an action or does it have to be unanimous and then um what about when a trustee needs one of those co-trustees needs to be replaced so there's three trustees one of them can't do it do does that one get replaced by somebody else or just do the remaining co-trustees serve by themselves and by the way when grandfather did designate an nephew then niece then second cousin grandpa what if nephew decides to resign and you really think nephew is a great guy do you want to give nephew the power to designate who that next trustee would be or do you want to just automatically go to niece and in that case he may say yeah you know i really really really trust my nephew so if he's going to resign his trustee i want him to be able to pick who the next trustee would be for my grandson so that there's that brings up another kind of layer of complexity and then uh there's the whole what if a trustee becomes incapacitated and they can no longer serve as trustee they get sick they die they get old they get alzheimer's they have a stroke well what does what does incapacitated mean that would cause that trustee to no longer be the trustee who determines when a trustee is incapacitated and can't serve anymore is it through a doctor statement is it two doctor statements if a trust has multiple beneficiaries can the beneficiaries declare that a trustee is incapacitated and must resign and if so is it all of the beneficiaries must do that together or majority of the beneficiaries is it going to require a court to determine that a trustee is incapacitated and they can't serve anymore so there's all those questions involved and then there's the in the event of a vacancy in the office of trustee how will a trustee be determined so grandfather designated nephew first then niece and second cousin what if not what if none of them are around to do it there's a vacancy in the office of trustee many trusts out there say in the event of a vacancy in the office of the trustee a corporate trustee will be appointed and that corporate trustee may have must have capital requirements of 100 million dollars or whatever but we desert found out earlier that many corporate trustees aren't going to be willing to accept the position as trustee unless there's a whole lot of money that they can manage and to justify their trustee compensation so then in the event of a vacancy in the office of trustee who gets appointed to be a trustee is it is it an attorney that must get appointed to be the trustee well attorneys are good at being attorneys but they're not necessarily good at being trusted you should be an accountant accountants are good at accounting but many accountants aren't good at serving as a trustee so all of these decisions getting kind of exhausting here all of these decisions when presented to someone who is setting up a trust can can appear really complicated in fact sometimes when faced with all of these overwhelming decisions the person who is considering setting up the the trust will just punt and say you know what i there's just too much um too much stuff here too many decisions that have to be made um i don't have that many people that i can designate i tell you what let's not make this trust for for my grandson's lifetime because this stuff is gets so complicated you know what when he's 21 he can have it or when he's 25 he can have it or when he graduates from college he can have it so sometimes parents will shift course when presented with too many overwhelming questions that have to be answered so but it is you know that's the challenge of creating a trust that may be in effect for many many decades to come you have to provide for the fact that people that you designate to fill certain roles are not going to be able to fill those roles in the future and so you have to have a succession for how all that how all of that gets taken care of so keep in mind when setting up a trust the trustee successor designation is a an important part of establishing things it may not appear too important now but it could be really critical 20 30 40 years from now so hope that helps give this video a big thumbs up if you haven't subscribed already make sure you do so hit the notification bell so you don't miss anything and we'll see you next time