What You Should Know Before Agreeing to Serve as Trustee
What You Should Know
Before Agreeing to Serve as Trustee
by Amy Clemmons Brown, Esq.
In the end, your responsibility
as a trustee will vary greatly depending on the size of the estate, the type of
assets covered by the trust, the type of trust, how many beneficiaries there
are, and the document’s terms. In light of this, you should carefully review
the specifics of the trust you would be managing before making your decision to
serve.
And remember, you don’t have to take
the job.
Yet, depending on who nominated
you, declining to serve may not be an easy or practical option. On the other
hand, you might actually enjoy the opportunity to serve, so long as you
understand what’s expected of you.
To that end, this article offers a brief overview of what serving as a trustee
typically entails. If you are asked to serve as trustee, feel free to contact
us to support you in evaluating whether you can effectively carry out all the
duties or if you should politely decline.
A trustee’s primary responsibilities
Although
every trust is different, serving as trustee comes with a few core
requirements. These duties primarily involve accounting for, managing, and
distributing the trust’s assets to its named beneficiaries as a fiduciary.
As a fiduciary, you have the power to act on behalf of the trust's creator and
beneficiaries, always putting their interests above your own. Indeed, you have
a legal obligation to act in a trustworthy and honest manner, while providing
the highest standard of care in executing your duties.
This means that you are legally required to properly manage the trust and its
assets in the best interest of all the named beneficiaries. And if you fail to
abide by your duties as a fiduciary, you can face legal liability. For this
reason, you should consult with us for a more in-depth explanation of the
duties and responsibilities a specific trust will require of you before
agreeing to serve.
Regardless of the type of trust
or the assets it holds, some of your key responsibilities as trustee include:
● Identifying and protecting the
trust assets
● Determining what the trust’s
terms require in terms of management and distribution of the assets
● Hiring and overseeing an accounting
firm to file income and estate taxes for the trust
● Communicating regularly with
beneficiaries
● Being scrupulously honest,
highly organized, and keeping detailed records of all transactions
●
Closing the trust when the trust terms specify
No experience necessary
It’s
important to point out that being a trustee does NOT require you to be an
expert in law, finance, taxes, or any other field related to trust
administration. In fact, trustees are not only allowed to seek outside support
from professionals in these areas, they’re highly encouraged to do so, and the trust estate will pay
for you to hire these professionals.
So even though serving as a trustee may seem like a daunting proposition, you
won’t have to handle the job alone. And you are also able to be paid to serve
as trustee of a trust.
That said, many trustees, particularly close family members, often choose to
forgo any payment beyond what’s required to cover the trust expenses, if that’s
possible. But how you are compensated will depend on your personal
circumstances, your relationship with the trust’s creator and beneficiaries, as
well as the nature of the assets in the trust.
I can help
Because serving as a trustee involves such serious responsibility, you should
meet with me, as your Personal Family Lawyer®, for help deciding whether or not
to accept the role. I can offer you a clear, unbiased assessment of what's
required of you based on the trust’s terms, assets, and beneficiaries.
And if you do choose to serve, it’s even more important that you have someone
who can assist you with the trust’s administration. As your Personal Family
Lawyer®, I can guide you step-by-step throughout the entire process, ensuring
you properly fulfill all of the trust creator’s wishes without exposing the
beneficiaries—or yourself—to any unnecessary risks. Contact me today to learn
more.
This article is a service of Amy Clemmons Brown, an Arkansas-licensed Personal Family Lawyer®. We don’t just draft documents; I ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That's why I offer a Family Wealth Planning Session™, during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. You can begin by calling my office today at 501-376-9119 to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge!
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