Who is a successor?

A successor is an individual or an organisation that takes over another’s responsibilities, duties or positions and handles them efficiently. And, the person appointed on your behalf is known as Successor. Succession refers to the transfer of duties and responsibilities to whom you trust and think capable of fulfilling your jobs on your behalf. However, a Successor can be a family member, an organisation, a trust or even a corporation. 

Why does the Successor need to be appointed?

The owner mainly appoints a successor because he/she is unable to handle his jobs and duties. Then the Successor setups and execute the eventual distribution of the estate. 

Following are the reasons why one should appoint a successor - 

● When the owner becomes incapacitated?

The Successor, until your death, takes up that role in the organisation for handling and investing the funds and spending on behalf of the owner. The Successor ought to be impeccably trustworthy and should also be capable of keeping trust properties separate from the personal. 

On behalf of the owner, the Successor will be responsible for fulfilling all the legal compliances as per the laws and regulations. Even, Successor can pay for necessary expenses related to the business or trust and get reimbursement for the same but after due approval.

● After the death of the owner:

The Successor has to fulfil his/her duties till the next owner has not been elected by the respective management. Even the Successor can identify, collect, and safeguard the estate properties and funds for distributing them among the eligible people as per the guidelines of the legal document.

Are beneficiary and Successor are different from each other?

Yes, both the heir and Successor are different from each other. The beneficiary is the ultimate owner of the business or trust, or organisation. He/she will have all the decision-making rights related to money, just like an owner. 

Whereas the Successor is a person who doesn’t have any right to decide for the real owner's estate. He/she has been appointed to handle the duties on behalf of the owner. The reason for this can be incapacity or the death of the owner. 

What are the duties of a successor?

The Successor is an indirect owner who does not have the right to decide the funds and assets of the estate. Following are the duties that need to be performed by the Successor:

● A successor's primary task is to manage the assets of the organisation until the time assets are not transferable to the beneficiaries.

● The Successor will perform all the legal compliances and duties on behalf of the owner. The Successor needs to plan a strategy for selecting and investing funds or assets to benefit the trust.

● The essential duty of a successor is to distribute the estate property as per the terms of the organisation or trust. 

Final Words

Serving as a successor is a hefty duty that needs a lot of effort, time and energy. This duty sometimes requires commitment for many years. So, before choosing a successor to make sure the person is compatible, honest and wise to handle all the jobs on your behalf.