If you have been asked to serve as a trustee, chances are you were initially flattered by the request. After all, it is quite an honor—a parent or loved one thinks highly enough of you to entrust you with managing a significant portion of their life’s savings. However, before agreeing to serve as trustee, it’s important to consider the responsibilities involved. Administering a trust typically involves the following duties—and often more:
- Locating and protecting trust assets
- Collecting life insurance policies, annuities, and retirement accounts that name the trust as the primary beneficiary
- Coordinating settlement of the estate with the personal representative if probate administration is necessary
- Obtaining the values of all trust assets at the time of the trustmaker’s death, including real estate and business interests
- Ascertaining and paying off all of the trustmaker’s debts from funds remaining in the estate
- Assessing income and estate tax liabilities
- Preparing and filing all required income and estate tax returns
- Paying the ongoing expenses of administering the trust until it can be terminated and distributed to beneficiaries
- Raising the cash necessary to pay off debts, ongoing expenses of administration, and estate and income taxes
- Investing and managing trust assets until they can be distributed to beneficiaries
- Distributing all assets left in the trust after all debts, taxes, and expenses have been paid
Accomplishing these tasks can be both time-consuming and, in many cases, extremely complicated. The first question to ask yourself is whether you have the time and skills necessary to administer the trust. Another important factor is that a trustee can be held personally and financially responsible for failing to carry out the mandates of the trust exactly as stated. Even inadvertent mistakes can result in severe penalties.
Given these challenges, the decision to serve as trustee should not be taken lightly. If you are considering whether to accept the role of trustee, Axis Estate Planning can help you understand the responsibilities and risks involved. Should you decide to serve, we can guide you through every stage of the process. If you prefer not to accept this responsibility, we can help you choose the ideal person to serve in your place.
Call us at (248) 920-9398 or visit www.axisattorneys.com to schedule a consultation today.
At Axis Estate Planning, we understand that estate planning is about more than just safeguarding your assets—it’s about ensuring that your legacy is managed and distributed according to your wishes. One of the most important decisions you’ll make in this process is selecting the right Trustee. A Trustee plays a crucial role in managing and distributing your assets according to the terms of your trust, ensuring your intentions are honored after your passing.
What is the Role of a Trustee?
A Trustee is the individual or entity appointed to manage and distribute the assets in your trust. As the creator of the trust, you can serve as the Trustee while you’re alive, but upon your disability or death, a successor Trustee steps in. This person or institution is responsible for following your outlined instructions to manage your estate. Selecting a Trustee who is responsible and detail-oriented is essential, as they are entrusted with protecting your legacy.
Fiduciary Duty: Acting in the Best Interest of Beneficiaries
The Trustee’s primary responsibility is their fiduciary duty—they must act in the best interest of the beneficiaries of the trust. Every action taken must benefit the beneficiaries and align with the terms you have set. This duty requires transparency, open communication, and accountability, ensuring that the Trustee’s decisions are justifiable and made with the beneficiaries’ best interests in mind.
At Axis Estate Planning, we help clients through the process of selecting the right Trustee and provide guidance to Trustees in understanding and fulfilling their fiduciary responsibilities.
Managing and Protecting Trust Assets
A Trustee must also take responsibility for managing and protecting the trust’s assets. This includes regularly reviewing investments, maintaining properties, and ensuring that the assets are preserved and managed effectively. The goal is to ensure that the trust remains valuable and that the beneficiaries benefit as intended.
Choosing a Trustee who is financially savvy can make a significant difference in how your assets are managed. At Axis Estate Planning, we provide resources and support to ensure Trustees are equipped to handle these responsibilities.
Record-Keeping and Tax Compliance
Accurate record-keeping is another crucial aspect of a Trustee’s duties. Trustees must keep a detailed record of all transactions, communications, and decisions made on behalf of the trust. This not only ensures transparency but also helps resolve potential disputes down the road. Additionally, the Trustee must handle the trust’s tax filings, which can be complex depending on the assets involved.
Many Trustees seek legal guidance to manage the complexities of tax filings and other obligations. Axis Estate Planning offers support to Trustees to ensure all legal requirements are met and that the trust is administered efficiently.
Making Distributions to Beneficiaries
Trustees are also responsible for distributing assets to beneficiaries according to the terms of the trust. These distributions may be straightforward, involving set amounts at specific times, or they may require the Trustee to exercise discretion in making decisions about how and when assets should be distributed. Selecting a Trustee who can manage these decisions thoughtfully and impartially is essential to maintaining the integrity of the trust.
Choosing the Right Trustee
Selecting the right Trustee is one of the most important decisions you will make in your estate planning process. Family members or friends may offer a personal touch, but it is crucial to ensure they have the time, experience, and temperament to handle the complexities of the role. In some cases, clients opt to appoint a professional Trustee, such as a bank or trust company, which can bring expertise and impartiality, though it often comes with a higher cost.
At Axis Estate Planning, we help clients evaluate whether a family member, friend, or professional Trustee is the right choice for their specific estate plan. We provide personalized guidance to help you select someone who can fulfill the role responsibly and effectively.
Ensuring Your Legacy is Protected
Understanding the duties of a Trustee is crucial for the success of your estate plan. By selecting a trustworthy and capable individual or institution, you can help ensure that your assets are managed responsibly and distributed according to your wishes.
At Axis Estate Planning, we are here to help you navigate every step of the estate planning process, from selecting the right Trustee to ensuring the proper administration of your trust. For more information or to schedule a consultation, contact us today.
Contact Axis Estate Planning
Phone: (248) 920-9398
Website: www.axisattorneys.com
Let us help you protect your legacy and provide peace of mind for your loved ones.
