Salvatore M. Capizzi, CEPA, CBDA, is Dunham’s Chief Sales & Marketing Officer with 45 years of financial-services experience. His commentary has appeared on Bloomberg Radio and Yahoo Finance and in Kiplinger, Financial Advisor magazine, and ThinkAdvisor. A 2026 ThinkAdvisor Luminaries and Wealthies finalist, he writes about retirement planning and advanced tax, trust, and estate strategies.
A successor trustee is the person or institution named to take over a trust when the current trustee can no longer serve. If you are your parent’s successor trustee, your responsibilities generally include following the trust’s terms and applicable law, monitoring trust assets, keeping records, communicating with beneficiaries, managing investments prudently, and handling required tax filings.
Key Takeaways
Becoming a successor trustee for your parent's trust is a legal fiduciary role, not just a title of trust or honor, and it activates the moment your parent becomes incapacitated or passes away.
Fiduciary duty legally requires putting beneficiaries' interests ahead of your own, following the trust document exactly as written, and avoiding any conflict of interest or self-dealing.
Mismanaging trust assets, favoring one beneficiary, or acting outside the trust's terms can expose a successor trustee to personal liability, removal by a court, and legal action from beneficiaries.
Core responsibilities include locating and organizing key documents, keeping accurate records, communicating regularly with beneficiaries, and managing investments prudently.
Trust administration rules vary by state, so successor trustees should confirm specific disclosure and reporting requirements with an estate attorney before making decisions.
A corporate co-trustee can share the legal and administrative burden, particularly for large, complex, or multigenerational trusts, and never has a lifespan that limits its ability to serve.
A Guide for Moving from Successor Trustee to Trustee of a Trust
Parents often name a successor trustee based on trust - someone they believe can carry out their wishes and protect their legacy.
But when that person is you - their child - the role comes with far more weight than most people realize.
Being named successor trustee isn’t just an honor. It’s a legal and fiduciary responsibility that can carry personal, financial, and legal consequences if handled incorrectly. You’re expected to manage assets, follow the trust’s terms, act impartially, and communicate with beneficiaries—often while navigating family dynamics and grief.
And many children step into this role without fully understanding what’s required of them.
This guide explains what it really means to be a successor trustee, how the role differs from being a trustee, and what responsibilities you should understand before taking control of your parent’s trust.
Trustee vs. Successor Trustee: What’s the Difference?
Typically, in a living trust, your parents are the trustees.
When parents act as trustees for their living trust, they assume the role of managing and administering their trust. As trustees, they have the authority to control and make decisions regarding the assets and provisions of the trust during their lifetime.
This arrangement gives your parents control over their property and financial affairs while benefiting from the flexibility and protections for their heirs offered by a trust structure. By acting as their own trustees, parents maintain autonomy over their trust assets and can appoint successor trustees who will take over the trust administration upon their incapacity or passing.
A successor trustee is someone designated to take over as trustee if your parents cannot continue. When you move from successor trustee to trustee, you step into the same role with the same responsibilities and powers as your parents. As successor trustee, you ensure the smooth continuation of trust management and carry out Mom and Dad's intentions outlined within their trust.
Successor Trustee Responsibilities at a Glance
Responsibility
What It Means in Practice
Confirm your authority
Review the succession provisions, required evidence, and appointment procedures before acting.
Identify trust assets
Confirm ownership, secure assets, and keep trust property separate from personal property.
Follow the trust
Make decisions under the trust’s terms and applicable law.
Keep records
Track income, expenses, distributions, and the reasons for significant decisions.
Inform beneficiaries
Provide notices, information, and accountings required by the governing law and trust.
Manage investments
Consider the trust’s purposes, distribution needs, liquidity, and investment risks.
Handle taxes and distributions
Coordinate required filings, evaluate obligations, and distribute assets according to the trust.
*General educational overview. A trustee’s authority and duties depend on the trust document and applicable law.
What is "Fiduciary Responsibility," and How Does it Affect You?
As the child named trustee of your parent’s trust, you step into a role that carries fiduciary responsibility. This means you are legally required to act in the best interests of the trust and its beneficiaries—which may include your siblings, other family members, charities, and even yourself.
Being a fiduciary isn’t symbolic. It’s a legal standard.
As trustee, you’re expected to manage trust assets prudently and make decisions in good faith when investing or distributing assets. In practice, that means:
Putting the interests of the beneficiaries ahead of your own
Avoiding conflicts of interest or self-dealing
Following the trust document exactly as written
Making decisions that are reasonable, defensible, and well documented
If you fail to meet these obligations, the consequences can be serious.
Breaching your fiduciary duty - whether by mismanaging assets, favoring yourself, or using trust property for personal benefit - can expose you to personal liability. Beneficiaries may bring legal action against you, a court can remove you as trustee, and you may be required to reimburse the trust for any financial losses caused by your actions.
In short, “good intentions” are not enough. Trustees are judged on conduct, process, and compliance with the law.
Understanding your fiduciary responsibilities is essential not only to administer your parents’ trust properly, but also to protect yourself. For many trustees, seeking guidance from an estate attorney, accountant, or trust professional is a practical step in navigating these responsibilities and avoiding costly mistakes.
Items to Consider Before Becoming a Trustee of Your Parents' Trust
Understand the Trust
You must first understand the trust you are responsible for. A Trust is a legal document outlining how assets will be managed and distributed to the beneficiaries. You should review the trust document carefully and understand its terms and provisions.
Locate all Important Documents
As the Trustee of your parents' trust, you are responsible for gathering the necessary documents upon their passing.
Locating these documents before your parents' passing can help avoid the task of searching for them during an already challenging time.
Begin by locating their last will and testament and any trust documents or living wills they may have created. Look for their birth certificates, marriage certificates, and social security cards required for various legal processes. Find their bank account statements, investment records, and insurance policies to assess their financial assets.
Collect property deeds, vehicle titles, and other ownership documents related to their assets. You must remember to gather any outstanding bills, tax returns, and estate planning documents they may have prepared. Remember, this task may require patience and thoroughness. So, take your time to ensure you have gathered all the essential documents to carry out their wishes and manage their estate appropriately.
Speak to Family Members
With Mom and Dad, tell family members about your critical role when your parents become incapacitated or pass away.
Your Guide for When You Become Trustee
1. Understand Your Authority and Follow the Trust’s Terms
Before making decisions, review your parents’ trust and confirm that you have the authority to begin serving. Your powers are limited by the trust document and applicable state law.
Once you become trustee, follow the trust’s distribution instructions and other provisions within those limits. If something is unclear, speak with an estate attorney before acting.
2. Locate and Protect the Trust’s Assets
Gather the trust document, amendments, account statements, deeds, and other records needed to identify the assets you will manage. Confirm which assets belong to the trust, and keep trust money and property separate from your own.
Being organized from the beginning can make an already challenging time more manageable.
3. Keep Accurate Records and Document Your Decisions
Keep records of the trust’s income, expenses, and distributions, along with supporting statements, receipts, and agreements. Good recordkeeping is one of your basic responsibilities as a trustee.
When you make a significant decision, write down what you decided and why. Create a system for tracking important dates so you do not have to rely on memory.
4. Communicate with Beneficiaries and Protect Sensitive Information
Keep beneficiaries informed as required by the trust and governing law. Notice, information, and accounting requirements can differ, so ask your estate attorney what you must provide, to whom, and when.
Protect sensitive information, but do not confuse confidentiality with withholding disclosures beneficiaries are entitled to receive. Nevada’s trustee accounting rules, for example, address who may receive an accounting, how one may be requested, and applicable exceptions.
5. Act Impartially and Avoid Self-Dealing
Your fiduciary responsibilities require loyalty, good faith, and attention to the interests of all beneficiaries—not just yourself or a selected few.
Impartiality does not necessarily mean everyone receives the same amount. Follow the trust’s provisions while giving proper consideration to each beneficiary’s interests.
6. Manage Investments Prudently
Work with your financial advisor to develop an investment approach suited to the trust’s objectives, distribution needs, and beneficiaries’ circumstances. The generally evaluates decisions within the overall portfolio rather than judging one investment in isolation.
Closing Thoughts
Being a trustee is a significant responsibility, and there are many things you need to know to manage a trust effectively. Remember to seek professional advice when needed, communicate regularly with the beneficiaries, and act in the best interests of all the beneficiaries. With these strategies in place, you can manage the trust with confidence and integrity.
FAQ
When does a successor trustee actually take over the trust? A successor trustee takes over when the event identified in the trust document occurs. Common events include the original trustee’s death, incapacity, resignation, removal, or unwillingness to serve. The successor trustee may need to accept the appointment in writing and provide evidence that the transition has occurred. Once in office, the successor trustee has the powers and duties set by the trust document and applicable state law.
Can a child successor trustee be held personally liable for mistakes? Yes. A trustee may face personal liability for losses caused by a breach of fiduciary duty, such as failing to follow the trust terms, acting with a conflict of interest, favoring one beneficiary improperly, or managing trust assets imprudently. A court may order the trustee to restore losses, remove the trustee, provide an accounting, or take other corrective action. Careful records and timely professional advice can help a trustee meet these responsibilities.
What is the prudent investor rule a successor trustee needs to follow? The prudent investor rule generally requires a trustee to invest and manage trust assets with reasonable care, skill, and caution. The trustee must consider the trust’s purposes, terms, distribution needs, time horizon, and the circumstances of beneficiaries. Investment decisions are generally evaluated in the context of the portfolio as a whole, rather than based on the outcome of one investment. State law and the trust document can modify the rule’s application.
Is a successor trustee legally required to keep beneficiaries informed? In many states, yes. Trustees generally have duties to keep qualified beneficiaries reasonably informed about trust administration and to respond to reasonable requests for information. Required disclosures, accountings, deadlines, and who qualifies as a beneficiary vary by state and by the terms of the trust. A successor trustee should review the governing trust document and consult an attorney in the state whose law applies before making disclosure decisions.
Why would a family successor trustee consider a corporate co-trustee? A corporate co-trustee can provide professional trust-administration, investment, recordkeeping, tax-reporting, and fiduciary experience. A trust company also provides continuity if a trust spans generations or if an individual trustee dies, resigns, or becomes unable to serve. Sharing responsibilities may reduce the administrative and emotional burden on a family member, especially when family dynamics, complex assets, or competing beneficiary interests are involved. Fees, authority, and decision-making procedures should be reviewed before appointing a co-trustee.
This communication is general in nature and provided for educational and informational purposes only. It should not be considered or relied upon as legal, tax, or investment advice or an investment recommendation, or as a substitute for legal counsel. Any investment products or services named herein are for illustrative purposes only and should not be considered an offer to buy or sell, or an investment recommendation for, any specific security, strategy, or investment product or service. Always consult a qualified professional or your own independent financial professional for personalized advice or investment recommendations tailored to your specific goals, individual situation, and risk tolerance.
Dunham & Associates Investment Counsel, Inc. is a Registered Investment Adviser and Broker/Dealer. Member FINRA/SIPC. Advisory services and securities offered through Dunham
Review the portfolio regularly, and ask questions when you do not understand a recommendation.
7. Coordinate Taxes, Distributions, and Trust Termination
Work with a tax professional to determine which returns and beneficiary tax forms are required. Depending on the circumstances, these may include Form 1041 and Schedule K-1.
Before making distributions or closing the trust, have your attorney and accountant review the applicable instructions, outstanding obligations, and final reporting requirements.
8. Seek Professional Advice and Consider a Co-Trustee
Do not hesitate to seek guidance from attorneys, accountants, or financial advisors with trust experience. You do not have to navigate every difficult question alone.
If the responsibilities feel overwhelming, ask your estate attorney whether a corporate co-trustee can be appointed. Before proceeding, clarify each trustee’s authority and responsibilities. Under Nevada’s co-trustee rules, adding a co-trustee does not excuse liability for inactivity in trust administration or failure to attempt to prevent a breach of trust.
Successor Trustee Responsibilities: What It Means When You’re Your Parent’s Trustee | Dunham
