The terms of the trust govern. Normally, there is a provision that once the grantor is deemed to be incapacitated, then the successor trustee takes over. If you are co-trustee, the trust MAY provide that you would be the sole trustee, in that event. Having dementia does not automatically disqualify someone to act as trustee. It depends on the extent of the incapacity. Normally, two physicians would certify that the grantor is no longer capable of handling financial matters, at which point, he or she would be deemed to have resigned as trustee.
It is a delicate undertaking and should be handled with care.
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Thanks for the question. James is correct. Ordinarily a well drafted trust will have provisions that govern the office of Trustee in the event of the grantor's dementia. Trusts usually say something like "upon the death or incapacity of Name, then Name will be Trustee." Incapacity (and how to show it) are usually defined somewhere in the Trust. If the trust does not have provisions for incapacity, you may need court intervention.
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As indicated by the other respondents, the trust terms will govern. As a co-trustee, the question is whether you have the right to act independently or are required to act jointly with your co-trustee. Another factor - did you co-trustee sign a durable power of attorney, appointing an attorney in fact to act on his behalf (both individually and as trustee)? So it may be more than just the trust that helps answer your questions. Ultimately, the documents need to be reviewed to answer your questions about handling trust matters going forward. Best bet is to have it reviewed by the attorney who drafted the documents - he or she will be familiar with the terms and conditions, and may have an answer to your questions more quickly (and at less expense). Good luck!
Co-Successor Trustees were appointed for a reason by the Grantor. Within a co-trustee in a condition of dementia, you can expect the beneficiaries to be closely wang the trust administration. I would suggest that you consult with estate planning legal counsel to interpret the terms and conditions for appointment of a successor co-trustee and the application to this particular instance. Early advice in this regard can save everyone interested from an abundance of headaches in the future.
This commentary does not result in any attorney/client relationship nor constitute legal advice as to a particular fact situation or status of a reader. Consult and retain legal counsel in the State of Michigan for pursuit of such a relationship.
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