Being asked to serve as a trustee can feel like a meaningful sign of trust from a family member or friend, but accepting the role also means taking responsibility for property, financial decisions, beneficiaries, and legal duties that can continue for years.
At Casey Lundregan Burns, P.C. we help people understand what serving as a trustee can involve before they accept the responsibility. We also work with trustees who need guidance throughout the administration of a trust.
What Are You Responsible for Managing?
Trust Property and Finances
A trustee can become responsible for real estate, bank accounts, investments, personal belongings, and other property held by the trust. These assets need to be identified, protected, valued, and managed according to the trust document.
Trustees can also be responsible for paying trust expenses, addressing debts, handling tax matters with the appropriate professionals, and keeping trust money separate from personal funds, all while maintaining records that show how trust property has been managed.
Distributions to Beneficiaries
A trustee generally cannot distribute money or property based only on what seems fair at the time. The trust document provides the framework for when and how beneficiaries receive trust property, and trustees must follow those terms when making distributions.
What Legal Duties Come With the Role?
A trustee is a fiduciary, meaning the trustee has been entrusted to manage property for the benefit of others and must put the beneficiaries’ interests ahead of personal interests.
Trustees are expected to act loyally, avoid conflicts of interest, manage trust property with appropriate care, and make thoughtful financial decisions. They also need to treat beneficiaries fairly, which can become difficult when one person receives benefits now while another is expected to receive property later.
Common Mistakes That Can Lead to Problems
Trust disputes do not always begin with a major mistake, since problems can develop from poor records, delayed distributions, missed tax matters, mixing personal and trust funds, or making decisions that do not follow the trust document.
Communication can also become a problem when beneficiaries feel that they do not know what is happening with trust property, expenses, or distributions. Beneficiaries can request information about how a trust is being managed, and concerns about delays, expenses, financial decisions, or a lack of information can sometimes lead them to question a trustee’s actions.
How Can Trustees Protect Themselves?
We encourage trustees to take organization and communication seriously from the beginning, since good records can help explain money coming into the trust, expenses being paid, distributions being made, and other decisions involving trust property.
Trustees are not expected to handle every legal, tax, or financial issue without support, and working with appropriate legal, accounting, and financial professionals can help them stay informed, make thoughtful decisions, and reduce the chance that an avoidable mistake will create problems later.
Talk With Casey Lundregan Burns, P.C. About Your Role
If you have been named as a trustee, you do not have to figure out every responsibility on your own. At Casey Lundregan Burns, P.C. we can help you understand the trust, your responsibilities, and the issues that can arise during trust administration so you can approach the role with greater confidence.
Contact Casey Lundregan Burns, P.C. at (978) 788-9934 or Contact Us Online to discuss serving as a trustee, trust administration, or creating a trust for your family.