The common terms in estate planning can be confusing and overwhelming. Terms such as “grantor,” “trustee,” “settlor,” “successor trustee,” “executor,” “personal representative,” and many others are commonly used. So much legal vernacular is enough to make someone’s head spin, especially without any prior knowledge of estate planning. This post will focus on who a trustee is, what a trustee should know, and the trustee’s common responsibilities.

The trustee manages the assets that are placed in a trust. The grantor (the one who decides which assets are in the trust) usually names the successor trustee to step in and manage the trust once the grantor becomes incapacitated or passes away. A trustee could be a person, two people acting together, or a corporation, such as a bank or trust company, or a combination of them.

What do I Need to Know?

The trustee should be familiar with the trust and its provisions. The trustee should read the trust document and stay updated on the trust assets and insurance policies. Additionally, the trustee should know where all of the relevant papers are located and keep them somewhere safe and secure. This is also a good time to make sure that the appropriate account have been changed to the trust, if necessary.

What Responsibilities Will I Have as a Trustee?

The most important thing to remember as the trustee is that you are not acting in your own interest. Rather, you are safeguarding and distributing the assets to the Trust’s beneficiaries. That might be the grantor, if still living but incapacitated, or it might be their beneficiaries if they have passed away. You must follow the instructions as stipulated by the grantor in the trust document. You must treat all trust beneficiaries the same and cannot show favoritism to one beneficiary over another unless the Trust directs that you do so. Trust assets must also be invested in a prudent manner that will result in reasonable growth with minimum risk, and considering the age of the current beneficiaries. Accurate records must also be kept, and tax returns may need to be filed for the trust each year that it remains open.

Additional responsibilities can be tacked on depending on whether the grantor is incapacitated or deceased. At incapacity, the trustee will ensure the grantor is provided for and any minor children are taken care of. The trustee is also responsible for notifying any critical parties, such as financial institutions, CPAs, and attorneys, of the incapacity.

Further responsibilities are required by the trustee at the time of the grantor’s death. The trustee should contact the attorney to review the trust administration process. An inventory of the Trust’s assets will also need to be completed.. Any outstanding bills and debts will  have to be paid, publication for unknown creditors may be required, and tax returns will need to be filed. Eventually, a final accounting will have to be prepared and distributed to the Trust’s beneficiaries. As you can see, thorough record keeping is of critical importance throughout the Trust administration process.

What Should I Do If I am Named as a Trustee?

The role and responsibilities of a trustee can be complicated and overwhelming, but they don’t have to be. There are many steps that must take place for successful trust administration. The Probate Pro is here and ready to help guide you and your loved ones through this process, and we encourage you to contact us with any further questions or for guidance during this complex time.

Go Ahead, Ask Away…

We’re here to help answer your questions. Probate matters can be complicated, let us be your guide. We have experts on hand to answer all of your probate related concerns. We take great pride in using our skills and knowledge to help walk you through all of your concerns. We take great pride in using our expertise for you and look forward to hearing from you.

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