What Does a Trustee Do?
Jan 20, 2012 / By: Suzanne H. Presley, Attorney at Law / Category: Wills and TrustsA trust is a legal arrangement that requires you to designate assets to be held in the trust, appoint one or more beneficiaries to receive the benefits of a trust, and appoint a trustee to administer the trust. Although there are numerous and varied trusts, all of them utilize a trustee. Before deciding who to appoint as trustee of your trust, be sure you understand the responsibilities of the trustee.
The trustee plays a critical role in a trust. While the terms of a trust dictate how the trust assets are to be handled, the trustee has the day to day control over the trust assets once the trust becomes active. The trustee is charged with not only protecting the trust assets, but also attempting to grow those assets by investing them in many cases. As you can clearly see, the choice of trustee is an extremely important decisions when creating a trust. Although a family member or loved one may seem a logical choice for trustee, many people choose to appoint an attorney or bank because of the impact the trustee has on the trust.
Along with guarding and growing the trust assets, the trustee has an obligation to the beneficiaries to treat them equally and impartially and to keep them informed. In some cases, this obligation can be complicated. For example, if a trust has current as well as future beneficiaries, the trustee must consider what decisions allow both classes of beneficiaries the most benefits when investing the trust assets.
Additional trustee responsibilities include disbursing the trust assets as directed by the trust, keeping records of the trust business and filing tax returns with state and local tax authorities.
Pyke & Associates, P.C. is a member of the American Academy of Estate Planning Attorneys.
Tags: Estate Planning, trust, trustee
