Duties of a Trustee: Managing a Trust

If you have been named a trustee of a trust, it is important to understand your duties and responsibilities. Managing a trust is not always easy, but it is important to do your best to protect the trust’s assets and fulfill the wishes of the trust creator. In case you are wondering what are the roles of a trustee, below is the list of responsibilities that you need to fulfill.

Protect the Trust Assets

As a trustee, you have a fiduciary duty to protect the trust assets. This means that you must take care of the trust property and manage it in a way that is in the best interests of the beneficiaries. You must also take steps to ensure that the assets are safe from theft, fraud, and lawsuits.

Fulfill the Wishes of the Trust Creator

The trustee is responsible for carrying out the instructions of the trust creator. This includes distributing assets to the beneficiaries according to the terms of the trust. The trustee must also make sure that the trust is administered properly and that the beneficiaries receive the proper benefits from the trust without delay or favoritism.

Invest the Trust Assets Wisely

It’s the solemn duty of the trustee to invest the trust assets wisely. This includes choosing investments that are appropriate for the trust, monitoring the performance of the investments, and making changes as needed. The trustee must also make sure that the trust assets are diversified so that they are not too heavily invested in any one area.

Keep Accurate Records of All Trust Transactions

The trustee is responsible for keeping accurate records of all trust transactions. This includes maintaining records of asset purchases and sales, income and expenses, distributions to beneficiaries, and tax filings. The trustee must also keep copies of all correspondence with the beneficiaries and other parties involved in the trust.

Keep the Beneficiaries Informed

It’s your duty as a trustee to keep the beneficiaries of the trust informed about the status of the trust and its assets. The trustee should provide annual reports to the beneficiaries detailing the income and expenses of the trust, as well as the asset values. The trustee should also provide any other information that the beneficiaries request promptly.

Pay Taxes on the Assets

To manage the assets of the trust effectively, the trustee will need to pay taxes on behalf of the trust. This includes filing annual tax returns and making estimated tax payments. The trustee must also keep track of any tax-exempt status of the trust assets and make sure that the beneficiaries do not pay more taxes than they owe.

Be Prepared to Handle Conflict

As a trustee, you must be prepared to handle conflict among the beneficiaries. This includes mediating disputes, making decisions about how to distribute the trust assets, and dealing with difficult personalities. You must also be prepared to defend the trust in court if necessary.

The duties of a trustee are very important and should not be taken lightly. If you have been named as a trustee, make sure that you understand your duties and responsibilities so that you can properly manage the trust and fulfill the wishes of the trust creator accordingly.