A trustee is the person who is responsible for managing a trust plan. The trustee acts as a custodian for the assets that are held in the trust and must manage and administer the funds in the trust according to the specific instructions given. Usually, the person who creates the trust is named the trustee until they can no longer fill the role due to incapacitation or death. If you have been named as a trustee or successor trustee for someone’s trust, then you are likely wondering what you are supposed to do. Below, we explain what you need to know about being a trustee.
Who Can Be Appointed as a Trustee?
Almost anyone over the age of 18 can serve as trustee. Most people appoint one of the following to serve as their trustee:
- Friends or Family: Although people commonly choose a friend or family member to be their trustee, this option can end in family drama and resentment. However, if your friend or family member is someone you deeply trust, then the peace of mind this option offers might be worth it. Choosing someone close to you has the benefit that they will know and understand your unique family dynamics.
- Attorney: If you don’t have a close family member or friend you feel comfortable giving this responsibly to, then you can appoint a lawyer. The benefit of choosing an attorney is that they are familiar with this area of law, and they will have insight into your wishes after you work with them to draft your trust documents.
- Trust Company: You can also hire a trust company if you want to take a stern, matter-of-fact approach to your estate. However, if it can be difficult to remove a trust company if you change your mind.
Can a Person Be the Trustee of Their Own Trust?
When you create a trust, you are transferring assets that you own into that trust. Since most people want to make sure they are in control of those assets, they name themselves as the trustee of their revocable living trust. After naming yourself as the trustee, you can name a person you trust as the successor trustee. The successor trustee will take over the role and control of your assets if you become incapacitated.
What Are the Responsibilities of a Trustee?
The trustee has many roles and responsibilities, but their priority is to adhere to and fulfill the directions listed in the trust documents.
Trustees are expected to perform some or all of the following tasks:
- Understand the basic terms outlined in the trust
- Act as a fiduciary by protecting the investments and distribution of assets in the trust
- Identify all beneficiaries of the trust and make sure they have access to the trust records
- Invest the assets in the trust with the intention of preserving them now and in the future
- Distribute to and/or administer trust assets for any beneficiaries
- Decide about how and when the beneficiaries receive payment
- Prepare and file tax returns
- Keep and maintain organized financial records and statements
- Answer questions about the trust and communicate with the beneficiaries
What Is the Difference Between an Executor & Trustee?
The trustee is responsible for administering the trust for the beneficiaries according to the trust, while an executor administers and distributes a deceased person’s assets according to a will.
Can a Person Be Both Executor & Trustee?
A person can serve as both the executor and trustee. If you are appointed to both of these roles, then you should contact an experienced attorney right away for guidance.
Speak to Our Trust Attorneys Today
As a trustee, you have a big job to handle. Managing a trust can be difficult, and even a simple mistake can be misinterpreted as misconduct. That is why you should consult with an experienced lawyer at the Law Office of Mitchell A. Port to discuss your concerns. Our esteemed legal professionals are familiar with the complex laws and regulations governing trusts, and we are prepared to put our knowledge to work for you.
Call (310) 526-3433 today for a free consultation or contact us online.