Founding Attorney
Contrary to popular belief, trusts are not reserved exclusively for the wealthy and offer a number of tax and other advantages. Establishing a trust is a critical step in developing a personalized and comprehensive estate plan. Selecting a trustee is a necessary component in setting up your trust, and the person you choose to serve in this role will exercise considerable authority. Understanding the trustee’s duties can help you make the right decision when it comes to deciding who will manage your trust. You can count on the team at Kallio Law Firm to guide you.
What Are a Trustee’s Duties?
A trustee is in charge of administering a trust according to the instructions it contains as well as applicable law. Trustees are considered to be fiduciaries, which means they are required by law to act in the interest of others (namely, the beneficiaries of the trust). These are a few of the specific obligations the trustee has:
- Administer the trust solely in the beneficiaries’ interest
- Administer the trust as a prudent person would
- Invest trust assets only as permitted by law and the trust instrument
- Maintain clear and accurate accounting of the trust and render the same to the beneficiaries at least annually, as dictated by the trust agreement
- If a beneficiary requests, the trustee must within a reasonable time provide complete and accurate information about the nature and amount of trust property
- Allow the beneficiary or its agents to inspect the subject matter, accounts, and documents relating to the trust
- Treat all beneficiaries fairly, impartially, and honestly
- Refrain from selling or encumbering trust property except as allowed by the trust
- Consult professionals as necessary to fulfill their duties
Tips to Select the Right Trustee
In light of the above duties, the task of choosing the best person to serve as trustee may seem daunting. A seasoned estate planning attorney can provide guidance for how best to go about making this choice. Your trustee should be someone who is:
- Detail-oriented and responsible: The accounting duties imposed upon the trustee require attention to detail and the ability to be responsible for important tasks. Someone who is forgetful or simply too busy may not be the right person for your trust.
- Financially skilled: Since trustees are required to give an account of trust assets and to carefully invest them, they should have some degree of financial knowledge. For this reason, you will want to consider a professional over a family member or friend.
- Able to understand their limitations: While a trustee should be knowledgeable about finances and related matters, they should have enough humility to know when to consult outside professionals. Doing so is required if it is necessary to properly administer the trust.
- Communicative and fair to beneficiaries: Trustees have certain affirmative duties with respect to beneficiaries, and must respond timely to their requests. They are also obligated to treat every beneficiary with fairness and honesty, so diligent communication is a must.
Helping You Create a Trust That Meets Your Goals
Every individual has their own objectives when it comes to developing an estate plan, including with respect to trusts. If you have never executed one of these instruments, it’s time to speak with Kallio Law Firm. We can explain the benefits of trusts and assist you in selecting the right person to be your trustee. Get started by giving us a call today.
