Anyone considering accepting an appointment as the trustee of a trust would do well to take the time to consider if they are right for the position. Though there are many different kinds of trusts and each have their own specific requirements, trustees are always considered a fiduciary, meaning they have a higher legal duty than an ordinary person. Here are several issues about being a trustee you want to consider carefully before making your choice.
The Trust, Trustee and Beneficiary Relationship
Your duties as a trustee are to act in accordance with the terms established by the trust in order to best serve the interests of the beneficiaries. The person who creates the trust, known as a trustor, grantor or settlor, will dictate under what terms you must operate. For example, you may be asked to serve as the trustee for a testamentary trust that someone establishes for his or her children. The terms of that trust may direct that you manage all the trust property until the children graduate from college or turn a certain age.
Managing the Trust
Your key duties as a trustee will be to manage the trust’s property. For example, upon the settlor’s death you, as the trustee, may have to locate the specific assets the trust owns, inventory them, pay any related taxes using trust property and begin distributing the property to the beneficiaries as the trust dictates.
Because the trustee’s duties often require specific knowledge about the law or financial management, inexperienced trustees must ensure they act responsibly by consulting experts when appropriate. An experienced estate planning attorney, for example, should be one of the first people you speak to when you are named as trustee. If you fail to act as the law requires, you may be personally liable for the damages caused.