Being chosen as a trustee for a loved one’s trust is a great honor, but it can also be a great responsibility. Kansas City residents who have taken on the role of a trustee must be careful in executing their duties. Some may wonder, what are the duties of a trustee?
First, the trustee must understand that their role is to keep the assets in the trust safe, both for the creator of the trust (if he or she is still alive) and for the trust beneficiaries. The assets in the trust do not belong to the trustee. Therefore, the trustee cannot commingle the trust assets with his or her own property. The trust should have a separate checking account and separate investments.
In addition, unless it is permitted in the trust, the trustee is not allowed to utilize the assets in the trust for his or her own benefit. And, there can be no favorites. All beneficiaries must be treated in an equal manner, unless the trust dictates otherwise.
Trust assets must be invested in a manner that is prudent. The trustee needs to ensure that the investments will result in a reasonable amount of growth without taking too many risks. The trustee also must keep accurate records for the trust. If needed, any tax returns must be filed. Finally, the trustee has to make reports to the trust beneficiaries, as dictated in the trust.
All of this may seem to be a heavy burden, especially if a person has never acted as a trustee before. However, trustees do not have to act alone. They can engage the services of an attorney practicing in trust and probate administration, who can help the trustee carry out their duties in a lawful and responsible manner.
Source: EstatePlanning.com, “Understanding The Duties and Responsibilities of a Trustee,” Accessed Dec. 26, 2016