Trusts can be a valuable element of a person’s estate plan. An individual might establish a trust to preserve family wealth, protect assets and avoid the probate process. Considering how vital trusts can be, the person tasked with managing them must take their responsibilities seriously.
However, this can be more challenging than you may expect, particularly if you do not understand what a trustee is supposed to do. If someone has appointed you as a trustee, you should know what you must do and what you must not do in this role.
Trustee duties
If you are a trustee, you may already know that your primary responsibility is to manage the assets in a trust. There is more to the role than just this, however. More specifically, in your capacity as a trustee, you may also be responsible for:
- Filing tax returns
- Investing the principal
- Managing any real estate in the trust
- Distributing property to beneficiaries
- Maintaining the property in a trust
- Creating an investment strategy
- Making investments
- Notifying beneficiaries of any developments regarding the trust
These are just some of the responsibilities a trustee may have. The precise nature of a person’s role will depend on the type of trust they will manage and the conditions set in a trust agreement.
With so many tasks that a trustee must tend to, there are numerous opportunities for mistakes or disputes to occur. Should this happen, legal battles can erupt, and a trustee could be in danger of being removed from his or her role. He or she could also face fines and other financial penalties.
Seeking guidance
Not every person named as a trustee is financially savvy or legally proficient. If you are a trustee, you may be someone the settlor trusts and knows will take the job seriously. That said, the expectations for you are the same as what they would be for a professional.
If you are unsure of what to do as a trustee or if you feel you need additional guidance to avoid costly mistakes, you can speak with an attorney skilled in supporting trustees through management and disputes.