When a trustee becomes incapacitated or dies, a successor trustee must take over. This makes the successor trustee responsible for fulfilling all of the trustee's obligations, including maintaining records of any income the trust receives and keeping records of any expenses paid. In certain cases, a successor trustee must also file income tax returns and open a bank account on behalf of the trust.
Although many people think of trusts as something only for the very wealthy, trusts are appropriate estate planning tools for a wide variety of estates, including those with modest assets.
According to a recent article, Minnesota residents may want to think carefully before forming an irrevocable trust. One of the primary differences between an irrevocable trust and a revocable trust is the ease or difficulty involved in making changes to the structure of the instrument. In the case of an irrevocable trust, for example, all trustees, beneficiaries and other parties involved must agree to changes before they can be formalized. In case of a revocable trust, an older version can be revoked in favor of a new trust as often as desired.
Deciding whether one should set up a will or a trust for particular estate planning purposes is dependent upon the circumstances. Preparing a will can be necessary to name beneficiaries, set up guardianships for minor children or even create a trust for incapacitated individuals.
Most Minnesota residents can see the logic in having a will. However, a will is only one part of estate planning. Many individuals may need trusts in order to ensure inheritances are protected on behalf of heirs and beneficiaries.