Have you recently discovered that you are the beneficiary of a trust set up by a loved one? If so, you may not be entirely comfortable with your inheritance and future being in the hands of someone else — the trustee.
The more informed you are about what the trustee is supposed to do, the better off you may be. You have the right to certain information regarding the trust, and you can keep an eye on the trustee’s activities. If you see any signs that the he or she is not properly administering the trust, you may have the opportunity to take action.
The basic duties of a trustee
Below is a list of tasks the trustee should be doing as he or she administers the trust of which you are a beneficiary:
- One of the first things a trustee ought to do is collect all the assets identified in the trust and take steps to preserve and protect them.
- The trustee is responsible for reporting the income from the trust assets and ensuring payment of all applicable taxes. He or she must also let you know how much income to report on your personal tax return, depending on the distributions you received in a particular tax year.
- The trustee is responsible for any investments made of the principal amounts of the trust in order to generate income for you and any other beneficiaries, if any.
- Recordkeeping is another crucial task the trustee must undertake. You deserve to know what is going on with the assets, such as the amount of money spent, invested and distributed.
In addition to these basic duties, the trustee is to administer the trust in accordance with the instructions contained within it. If you get the chance to read the trust, you should, in order to know what the trustee is supposed to be doing on your behalf. Having a basic understanding of the trust and the trustee’s duties can help you identify whether something may be amiss.
If you suspect wrongdoing or mistakes on the part of the trustee, it would help to gain an understanding of your rights and legal options. You may want to take your suspicions to an attorney experienced in trust litigation who can thoroughly review the situation, give you an honest assessment and provide you with a viable course of action going forward.