To understand the roles and responsibilities of a trustee, it is essential first to understand what a trust is. A trust is a legal document that gives another person or entity the authority to make certain decisions on the grantor’s behalf. Unlike a will, it can go into effect as soon as it is written, which means the person designated as the trustee may begin making those decisions while the grantor is still living. These directives are often related to the distribution of finances and assets.
There are four primary parties involved in the formation of a trust.
- The grantor is the person who creates the trust, and for whom the trust is for.
- The trustee is the person named by the grantor to manage the assets included in the trust.
- The successor trustee is the person who will take over the management of the trust in the event the original trustee is no longer able or willing to manage the trust.
- The beneficiaries are the recipients of the assets of the trust when the grantor dies.
A trustee is responsible for safeguarding the trust’s assets, and you are required to do so in accordance with the trust’s instructions. Some examples of the trustee responsibilities include:
- Separation of the trust accounts and trustee’s personal accounts
- Unless authorized by the trust, you are not allowed to use trust assets for your own benefit
- Trust beneficiaries are to be treated equally
- Conservative investment of trust assets
- Keeping detailed and accurate recordkeeping as well as updated reporting to beneficiaries
- Filing appropriate tax documentation with the appropriate authorities
This list may seem like an overwhelming responsibility for one person to manage; however, many resources are available to help trustees manage a trust. The experienced estate planning attorneys at Hoover Kacyon LLC are ready to help you plan for the future. Our will and trust lawyers can help you understand and clarify the estate planning documents as well as your roles and responsibilities as a party involved with a trust.