Successor trustees assume the role of trust administrator when a trustee dies, becomes incapacitated, or can no longer fulfill trustee duties. The successor trustee will carry out fiduciary and administrative responsibilities in accordance with the guidelines in a trust’s documentation. Choosing to appoint or become a successor trustee in Nevada requires specific action under the law.
Successor Trustees Execute Trust Provisions
A Nevada successor trustee’s primary goal is to execute a trust’s provisions. A successor trustee will manage the trust’s assets in accordance with the trust’s directives. They will also ensure the distribution of assets based on the trust’s terms, according to NRS 164.710.
Successor Trustee Actions Must Promote Beneficiary Interests
Any individual, entity, or business acting as a successor trustee must act solely in the interest (NRS 164.715) of a trust’s beneficiaries. Financial decisions, like investments, unless otherwise stated in a trust’s documentation, should promote beneficiary interests. As a successor trustee, you may be liable for any actions that do not serve a trust’s beneficiaries.
Impartiality is Required When Administering a Trust
A successor trustee’s actions cannot benefit one beneficiary over others when multiple beneficiaries exist in a trust. Nevada law requires that each beneficiary receive impartial treatment under a successor trustee’s management and investment of a trust’s property.
The successor trustee must consider each beneficiary’s differing interests and administer the trust in a manner that is reasonable and fair. Exceptions to NRS 164.720 may occur, allowing a successor trustee to show partiality to a beneficiary, when the terms of a trust clearly define and permit these actions.
Prudent Investment to Protect Beneficiary Assets
Reasonable care is a requirement when investing and managing beneficiary assets. The successor trustee is required to consider factors such as overall economic conditions, inflation, and other variables that affect asset value. The financial decisions regarding a trust’s assets should aim to minimize risk while encouraging growth, according to NRS 164.745.
Receive Approval for Appointment Under Specific Circumstances
Appointing a successor trustee may be necessary when a trustee can no longer fulfill their duties and trust documents do not specify a successor trustee (NRS 163.600). A trust’s documents may establish when it is necessary to appoint a successor trustee and how to do so.
Beneficiaries may have the right to appoint a successor trustee by unanimous vote. The involvement of the court or physician may also be necessary to appoint a successor trustee when the original trustee dies, becomes incapacitated, is missing, or is detained.
Additionally, the law requires a successor trustee to relinquish their role if an original trustee regains the capacity to administer the trust. The original trustee will document their ability to continue in their role and execute their duties.
Document Transactions on Behalf of a Trust
Receipts, invoices, statements, and other documentation are necessary to support the decisions you make on behalf of a trust and its beneficiaries. Documentation offers proof of reporting to beneficiaries. The records a successor trustee keeps also verify the filing of taxes and compliance with all legal obligations.
Transactional records may also protect against liability for those who serve as a successor trustee. A lack of documentation may provide legal grounds for beneficiaries who suspect a successor trustee has breached their fiduciary duties.
Complying with the terms of a Nevada trust is essential. Navigating the law and its impact on decisions that influence a trust is often complex. Strive to ensure meeting the legal requirements for a successor trustee in Nevada to protect a trust and its assets.