Taking steps to establish a comprehensive estate plan is one of the most loving and beneficial gifts a parent can bestow to his or her heirs. In addition to a will, an individual may choose to establish one or more trusts for the benefit of minor-aged children, surviving heirs or charitable organizations. In addition to clearly defining the terms of how assets held in a trust are to be distributed, a trust’s grantor must also designate a trustee who will oversee and manage the trust.
Once a trust is established, the trustee has the responsibility of making decisions related to the investment and management of any property and assets held therein. Additionally, the are responsible for distributing assets in accordance with the grantor’s wishes. At all times, the trustee has a fiduciary responsibility to carry out actions that serve to benefit the trust.
Many individuals who take on the role and responsibilities of a trustee are unaware of the financial, legal and tax requirements that must also be fulfilled. Additionally, at any time the beneficiaries of a trust may take issue with a trustee’s decisions or with how a trustee is investing a trust’s assets. Disputes related to these matters may result in a beneficiary taking legal action to have a trustee removed or worse.
Individuals who are bequeathed the role of trustee bear many responsibilities, some of which may prove to be overwhelming and complex in nature. Individuals who assume the role of trustee can often benefit from the guidance of a legal professional who handles and is well-versed in matters related to trust administration.
Source: American Bar Association, “Guidelines for Individual Executors & Trustees,” 2014
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