If someone has appointed you trustee of a trust that is a vote of confidence in you, but it is also a lot of responsibility. Below is a list of your main responsibilities:
- Fiduciary Duties – you are held to a very high standard in a fiduciary role in relation to the beneficiaries or remainder men of the trust.
- Trust’s Terms – be sure to read the trust terms carefully and abide by the trust’s directions.
- Investment Standards – you must make prudent investments that consider the interest of current and future beneficiaries alike.
- Distributions – sometimes you will have discretion in what distributions you make. You should consider the beneficiary’s other sources of income along with his/her needs. You also need to be able to say no if a distribution is not for the well being of the beneficiary or consistent with the trust terms.
- Accounting – you need to keep track of all income to, distributions from, and expenditures from the trust. You will need to give an accounting to the beneficiaries annually.
- Taxes – be sure to keep good records for when you need to file an annual tax return and pay taxes for the trust.
- Delegation – You cannot delegate your responsibilities, but you can delegate some of your functions as trustee. Be sure to delegate these functions prudently.
- Fees – As trustee, you are generally entitled to a reasonable fee for your services. In general, what is reasonable will depend on the resources of the trust, the experience of the trustee, how much work the trustee is doing, among other factors.
If you or a family member need assistance with living trusts call me at (716) 333-5144.