A Personal Approach To Resolving Your Estate Planning & Litigation Concerns

Understanding the duties of a trustee

by | May 1, 2019 | Wills & Trusts

People work hard to obtain their assets. It is only right that those individuals be able to delegate their assets as they desire. A proper estate plan can aid in accomplishing this, and a trust is a beneficial tool within the plan.

A trustee is the party in charge of maintaining and distributing the assets of the trust. When the grantor dies, the trustee must begin fulfilling the duties of the position.

Read the trust document carefully

Ideally, the grantor has already reviewed all his or her instructions with the trustee. Regardless of whether the documents are familiar to the trustee, he or she should read through them carefully and note all the grantor’s wishes. If there is a co-trustee, it is important to notify this person immediately.

Honor the trust agreement

One of the major requirements of the trustee is to act in the interest of the grantor by administering the trust as described in the trust agreement. For example, the trustee may need to collect a life insurance or retirement plan death benefit and place that asset into an interest-bearing account.

The trustee has some power to deviate from the agreement when necessary or beneficial to the receiving parties, such as when a spouse or other beneficiary needs some money to live on before the trustee has finalized all relevant matters. However, the trustee should limit these occurrences.

Remain loyal to beneficiaries

A trustee must manage the trust properly for whatever length of time the grantor has specified. In some cases, there may be one distribution over a short period of time. However, in the case of a special needs trust, the distributions may occur over the lifetime of the beneficiary. Therefore, a loyalty to the beneficiary and his or her needs is critically important. If there is more than one beneficiary, the trustee must be impartial and properly administer the trust between the two. It is also the responsibility of the trustee to monitor the trust consistently, and investigate any activity that does not seem correct.