Q: What is a trustee called after the grantor dies? The trustee was also listed as a co trustee.

A: The legal term “Trustee” is the title of the person with the right to handle assets in the trust and who must fulfill all the legal duties associated with that right. The word “Co-Trustee” means there are two people serving together as Trustees. They may have to do everything together or may have the right to work independently, depending on the language in the trust.

Once the person who set up the trust for themselves (called a Settlor or Trustor) dies, the next Trustee in line steps up to the plate. The Trustees in line behind the Settlor are called “Successor Trustees” because they succeed (serve as Trustee after) the Settlor. If there are two Successor Trustees, they are either called “Co-Successor Trustees” or “Successor Co-Trustees.”

Your distribution questions are best discussed with a CPA because there are tax implications that are very fact-specific to each situation. We would need far more information to adequately respond to questions like yours.

Best wishes!

A: After the grantor's death, the co-trustee becomes the successor trustee, managing the trust according to its terms and the grantor's wishes.

Regarding capital gains on inherited stocks, beneficiaries receive what's called a "step-up in basis" to the fair market value as of the date of death. This means if they sell the stocks, they'll only pay capital gains tax on any increase in value from the date of death forward, not from the grantor's original purchase price. This step-up in basis rule can offer significant tax advantages for beneficiaries.

The decision between distributing stocks versus selling and distributing cash depends on several factors. If beneficiaries plan to sell immediately, it might be simpler to sell and distribute cash, saving them transaction fees. However, if some beneficiaries wish to hold the stocks long-term, transferring the securities directly allows them to make their own investment decisions and time their sales for optimal tax planning. You should discuss these options with your tax advisor, as individual circumstances and market conditions can affect the best choice for your situation.