Those with complicated family situations, major personal assets or significant personal debt might create a trust as part of their estate plan. If you accepted the role of trustee, there are certain responsibilities that you must fulfill.
What are the primary duties that a trustee must perform to avoid personal liability or challenges in court?
Appropriate management of estate assets
As the trustee, you have a fiduciary duty to the beneficiaries. It is your job to manage the assets properly so that they don’t lose value and ideally that they increase in value. Your responsibilities might necessitate hiring someone for property management, paying bills and taxes or even performing maintenance on physical assets or properties.
Documenting the use of trust resources
Whether you need to pay for a lawyer’s services or for insurance that protects trust assets, you need to make sure that you maintain a thorough and accurate financial record for every payment you make using trust resources. You also need to keep records about the distribution of assets to the beneficiaries of the trust.
Complying with the instructions for trust administration
A trustee may technically be the one with control over trust assets, but they don’t usually get to decide what to do with them. Instead, they must defer to the instructions provided by the person who created the trust. If they placed restrictions on distributions or limits on how much someone could withdraw, it is your responsibility to uphold those rules.
Understanding the expectations when you manage a trust can help you fulfill your obligations and avoid mistakes that could remove you from your role.