Overview

If you’ve been named as a Successor Trustee under a Michigan Trust, your role is governed by the Michigan Estates and Protected Individuals Code (EPIC), MCL 700.7101 et seq. This important fiduciary position carries significant legal and practical duties in managing and distributing assets according to the terms of the Trust. Below is a comprehensive overview of what it means to serve as a Successor Trustee under Michigan law.

What Is a Successor Trustee?

A Successor Trustee is the person or entity appointed to take over management of a Trust when the original Trustee is unable or unwilling to continue. Pursuant to MCL 700.7701, Trustees—including Successor Trustees—are fiduciaries, which means they must act in good faith and in the best interests of the beneficiaries.

Key points:

• A Successor Trustee assumes authority after the Grantor’s incapacity, resignation, or death.
• The Successor Trustee must follow the specific terms of the Trust and comply with Michigan law.
• The role includes both administrative and legal responsibilities, including asset management, tax compliance, and communication with beneficiaries.

Initial Duties When Appointed

Once you learn of your appointment as Successor Trustee, you should:

• Review the Trust instrument and all amendments to understand its terms.
• Contact the Grantor (if living) or the estate’s legal representative.
• Gather and secure all Trust documents and related records.
• Create an Inventoryof Trust assets including real estate, accounts, and personal property.
• Verify the location of critical items such as deeds, insurance policies, and investment statements.

Responsibilities After the Grantor’s Death

Under EPIC, Trustees must act promptly and prudently. Upon the Grantor’s death, you must:

• Secure Trust Assets: Protect real estate, financial accounts, and personal property. 
• Notify Beneficiaries and Interested Parties: Successor Trustees are required to timely notify beneficiaries and heirs.
• Notify Government Agencies: Contact the Social Security Administration to report the death and prevent benefit overpayments.
• Pay Obligations: Identify and pay utility bills, insurance premiums, and valid debts of the deceased.
• Arrange Funeral or Memorial Services: Coordinate with family and follow any instructions within the Trust.
• Gather Financial Records: Collect bank statements, tax returns, and insurance information to prepare for accounting and potential court filings.

Taking Control of Trust Accounts

After receiving the official death certificate, present it to financial institutions to transfer control of Trust accounts. This enables you to pay outstanding obligations, manage ongoing Trust administration, and distribute assets as authorized by the Trust. A Trustee must exercise reasonable care, skill, and caution in managing Trust property.

Addressing Debts and Insurance Policies

As part of your fiduciary duties, you should:

• Notify credit bureaus and financial institutions of the Grantor’s death. 
• Cancel unused credit cards and safeguard against identity theft.
• Contact insurance providers (life, home, auto, health) and file any necessary claims.
• Review beneficiary designations to confirm whether the Trust is named as beneficiary.
• Use insurance proceeds or liquid assets to settle valid debts before distributions.

Common Questions About Michigan Successor Trustees

1. What if the Grantor becomes incapacitated?
   If the Grantor is incapacitated, the Successor Trustee steps in to manage the Trust for the Grantor’s benefit. The Trustee’s primary obligation remains to act in the best interest of the Grantor during their lifetime, consistent with EPIC’s fiduciary standards.
2. Am I required to serve as a Successor Trustee?
   No. You may decline the appointment. Under Michigan law, if you refuse or resign, a successor named in the Trust—or appointed by the court—can step in.
3. Can a Successor Trustee be compensated?
   Yes. Michigan law allows Trustees to receive reasonable compensation for their services. Compensation should reflect the time, effort, and complexity involved in the administration process.

Practical Guidance for Michigan Trustees

Serving as a Successor Trustee is a serious responsibility that requires organization, diligence, and compliance under Michigan’s EPIC law. Trustees should maintain accurate records, communicate regularly with beneficiaries, and seek legal advice when complex issues arise.

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Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a qualified Michigan estate planning attorney before making decisions based on this content.