Trustee Duties and Responsibilities in Estate Administration
Trustee duties and responsibilities play a crucial role in estate administration or trust administration. When someone establishes a trust, they appoint a trustee to manage and distribute the assets according to the terms of the trust document.
The trustee has fiduciary obligations, meaning they must act in the best interests of the beneficiaries and adhere to certain legal standards. These duties typically include:
1. Administration: The trustee is responsible for managing and overseeing the trust’s assets, which may include investments, property, or financial accounts. They must ensure that all assets are properly maintained and accounted for.
2. Record-Keeping: Trustees are should keep accurate records of all transactions related to the trust, including income received, expenses paid, distributions made, and any other relevant financial activities.
3. Communication: Trustees have a duty to communicate with beneficiaries regularly. This includes providing updates on the status of the trust’s assets and addressing any concerns or questions that beneficiaries may have.
4. Fiduciary Duty: Trustee’s fiduciary duty requires them to act in good faith and with loyalty towards the beneficiaries. They should always prioritize the interests of the beneficiaries over their own personal gain.
5. Prudent Investment: Trustees should make informed investment decisions regarding trust assets by considering factors such as risk tolerance, diversification, and potential returns. They should exercise reasonable care when managing investments to ensure long-term growth for the benefit of beneficiaries.
6. Distribution: Depending on the terms of the trust document, trustees may be responsible for making distributions to beneficiaries at specified times or under specific circumstances outlined in the trust agreement.
7. Legal Compliance: Trustees must comply with all applicable laws and regulations governing trusts and estate administration. This includes filing necessary tax returns on behalf of the trust and ensuring compliance with local probate laws if applicable.
It is important for trustees to understand their duties thoroughly as failure to fulfill these responsibilities can lead to legal consequences or disputes among beneficiaries.
The task of reviewing the trust, gathering, and valuing assets of an incapacitated or recently deceased loved one can be extremely stressful and overwhelming. Anyone who acts as a Successor Trustee needs sound advice, experienced legal representation, and guidance. There are many pitfalls and traps for the Successor Trustee who attempts to administer a trust without qualified legal representation. Those who try may unnecessarily subject themselves to claims for breach of trust or breach of fiduciary duty.
Cannon Legal Firm’s Trust Administration services include:
- Advising the trustee about his or her legal duties, and obligations
- Explaining trust terms and provisions as well as procedures the Successor Trustee must follow
- Ensuring that proper notices are sent to all interested parties and organizations
- Assisting with identifying, gathering, and valuing trust assets
- Advising regarding proper distribution of trust assets
- Providing guidance and assistance in the sale of real property
- Providing guidance and assistance in the preparation of a trustee’s report and accounting
- Providing assistance with disputes among trust beneficiaries, between beneficiaries and the Successor Trustee
- Providing assistance in resolving disputes or defending trust litigation, if necessary