Dear Liz: My husband agreed to serve as successor trustee for his brother’s living trust several years ago. My brother-in-law also added me as a backup.
My brother-in-law’s financial situation has gotten very complicated and we would like to be removed as trustees.
How do we go about this removal? My husband has asked his brother to see the lawyer who drafted the trust so they can both discuss the change, but his brother has ignored this request for several months.
Answer: A successor trustee’s role is similar to that of an executor. Both are charged with settling someone’s estate. Being asked to serve is an honor, since the person choosing you is saying they expect you will act with honor, integrity and prudence. But you can’t be forced to serve, even if you initially said yes.
Your brother-in-law may have already named other alternatives. If not, a court can appoint someone. This would undermine one of the benefits of a living trust, which is to avoid a court’s involvement in settling an estate. But that’s ultimately your brother-in-law’s problem to solve, not yours.
Before you bail, though, understand that as successor trustee or executor, you don’t have to be a legal or tax expert. You can use the estate’s resources to hire people to help you — and in all but the simplest estates, you probably should.
Of course, financial complications can lead to other complications — family fights, disgruntled heirs and so on. You may no longer have the energy or willingness to face such difficulties. If that’s the case, you’ve given your brother-in-law the heads-up he needs to make other arrangements.
Dear Liz: I was 36 with two young children, ages 6 and 2, when my husband died. We are collecting Social Security survivor benefits. I work only part time since my kids are so young. He left two IRAs: one that named me as a beneficiary and one that didn’t name anyone. I understand I can treat the first one as if it were my own, and put off taking withdrawals. The second one must be drained within five years. Will the withdrawals from the second account affect my gross income and ability to collect our monthly Social Security benefit?
Answer: The withdrawals will be considered taxable income, but the money shouldn’t affect your survivor benefits.
Social Security benefits received before your full retirement age are subject to the earnings test, which withholds $1 of benefits for every $2 you earn over a certain amount, which in 2025 is $23,400. The earnings test includes wages and self-employment income, but doesn’t include withdrawals from retirement accounts.
Liz Weston, Certified Financial Planner, is a personal finance columnist for NerdWallet. Questions may be sent to her at 3940 Laurel Canyon, No. 238, Studio City, CA 91604, or by using the “Contact” form at asklizweston.com.
