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Let’s Talk about The Duties and Responsibilities of a Trustee.

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If you are named as either a trustee or successor trustee for someone’s trust, you may be wondering what your duties are. Understanding The Duties and Responsibilities of a Trustee is crucial. A trust lawyer can help guide you through the process.

What do I need to know upon being named as a trustee?

The grantor forms the trust, while the Trustee runs the trust. Your first step must be reviewing and understanding all the trust’s terms. You are accepting personal responsibility, make sure you know the risks.  Trusts are wonderful tools.  Trusts can protect your children and your spouse.  But, to provide this protection, the trust can also be complicated. Without a background in trusts, they can appear strange and difficult to understand. As a trustee, you have the right to hire a Trust Attorney to guide you.

Furthermore, you need to know the location of the trust document, assets, insurance policies, and other essential papers. However, the grantor may not want to show you the value of the trust assets. If so, you should consider not accepting the job.

You also need to know if you will be acting alone or with someone else. If working with others, you’ll need to know who the other trustees are.  If they cease to serve, who are the successor trustees?

What Are The Duties and Responsibilities of a Trustee?

When you step in as trustee, you need to remember that these are not your assets. Your job is to safeguard them for others: 

• For the grantor (if living) 
• For the beneficiaries, who benefit from the assets

As a trustee, The Duties and Responsibilities of a Trustee might include:

• Following the instructions in the trust document
• Keeping trust assets separate from your own
• Refraining from using trust assets for your benefit (unless the trust authorizes it)
• Treating trust beneficiaries the same—you cannot favor one over another unless the trust says so
• Investing trust assets conservatively, in a way that likely results in reasonable growth with minimum risk
• Keeping accurate records
• Filing tax returns 
• Reporting to the beneficiaries as the trust instructs

Do I have to do all of this on my own?

No! You can have professionals help you. You are well-advised to consult with a trust attorney. A lawyer will tell you that you are ultimately responsible to the beneficiaries for managing the trust assets sensibly.

What do I do if the grantor becomes incapacitated?

If the grantor places assets in the trust, the trustee immediately has control. If the grantor later becomes incapacitated, the trustee can continue managing the assets. The purpose of many trusts is providing care for a grantor should the grantor’s illness escalate. For example, a trustee may form a Revocable Living Trust after being diagnosed with Alzheimer’s disease. The trustee manages the assets while the grantor is still competent, but continues to manage them once the disease robs the grantor’s capacity.

What do I do upon the grantor’s death?

Some trusts exclude the grantor, so the grantor’s future death does not affect.  Some trusts, such as Revocable Living Trusts, are for the grantor. When the grantor dies, the trust terms should dictate your new responsibilities. The transaction after the grantor’s death should be transparent.  The trustee might be tasked to turn the assets over to a charity, or the trust could create a Dynasty Trust which will continue forever providing the grantor’s descendants care.  Have your Trust Attorney advise you. This transition should be clearly understood. 

As the trustee, you are responsible for seeing that everything is done correctly and on time. You may be able to do some of this yourself, but a trust attorney can give you valuable guidance and assistance. A qualified estate lawyer in Allentown, PA, can give you an overview.

Set up a consultation to review the trust document, trust assets, and your duties and responsibilities as soon as possible. 

The Duties and Responsibilities of a Trustee:

I hope you enjoyed this short article about The Duties and Responsibilities of a Trustee.  For more information, follow this link to learn more about Trust Litigation.

Contact Klenk Law for their insight into estate planning and duties of a trustee.