Being named the trustee of someone’s funds can be a somewhat overwhelming responsibility — especially if you aren’t sure what’s expected.
What exactly is a trustee? What are a trustee’s main duties? Here are some answers that may help.
A trustee is the person appointed to oversee the assets contained in a trust for the beneficiaries of that trust. Doing that correctly is important to avoid potential problems and possible lawsuits.
As a trustee, you must:
1. Understand the language of the trust
Your discretionary powers are limited by the terms of the trust. Some trusts endow a trustee with a great deal of latitude, while others are very limiting. Either way, you are expected to make the best possible choices within that framework.
2. Be loyal to the beneficiaries
Your fiduciary duty toward the beneficiaries of the trust means that you must always put the interests of the beneficiaries above your own. You cannot profit from your role as the trustee (aside from a reasonable fee for your services).
3. Manage the assets efficiently
Managing the trust’s assets requires regular accounting procedures, filing and paying taxes properly and keeping accurate records of all the transactions made for the trust. Good accounting practices are a must to avoid complications.
4. Invest the assets wisely
Trusts are designed to earn income for the beneficiaries. It’s your responsibility to invest the assets in a way that supports the goals of the trust and aids the beneficiaries.
5. See that assets are disbursed properly
You must take into account the needs of the beneficiaries when you disburse the assets in a trust. It’s important to make distributions in a timely manner so that the beneficiaries are never at a disadvantage due to your administration.
As a trustee, you are ultimately in charge of the trust, but you are encouraged to seek assistance when you need it to better manage your responsibilities. A probate and estate attorney can help you understand your duties and guide you through the process.