What Are the Duties and Responsibilities of a Trustee?
Whether you want to set up a special needs trust or a charitable remainder trust, it is vital to pick the right person to administer it. Before you can make your choice, however, you’ll need to know exactly what a trustee does.
So, let’s take a look at a brief list of some of their most important duties and responsibilities:
Asset Management
Trustees are entrusted with managing the assets held within the trust. This can include investing those assets wisely to ensure growth and stability – while also considering the risk tolerance and long-term goals outlined in the trust agreement.
Fiduciary Duty
One of the foremost responsibilities of a trustee is to adhere to the highest standards of fiduciary duty. This duty entails acting in the best interest of the beneficiaries of the trust.
This means making decisions with careful consideration of the beneficiaries’ needs and interests – and avoiding any conflicts of interest.
Record-Keeping
Accurate and thorough record-keeping is essential for trustees to fulfill their duties responsibly.
Trustees are typically expected to maintain detailed records of all transactions, investments, and distributions – in addition to keeping a log of any communications related to the trust.
Compliance with Legal and Tax Requirements
Trustees must adhere to all laws, regulations, and tax requirements governing trusts. Depending on the nature of the trust, this may include filing yearly tax returns, obtaining licenses or permits, and complying with trust-specific legal provisions outlined in the trust agreement.
Failure to comply with legal obligations can result in penalties and legal liabilities for the trustee.
Conflict Resolution
Trustees may encounter conflicts among beneficiaries and other parties involved in the trust. The trustee must handle such disagreements impartially and under the terms of the trust agreement. This may involve mediating, seeking legal advice, or making decisions that prioritize the best interests of all beneficiaries.
Distribution Management
Depending on the terms of the trust, trustees might be responsible for managing and distributing income or assets to beneficiaries. This requires careful consideration of each of the beneficiary’s needs, financial circumstances, and the purpose of the trust.
Trustees must exercise discretion and fairness in making distribution decisions.
Regular Review and Evaluation
Trust administration is an ongoing process that requires periodic review and evaluation of the trust’s performance, objectives, and administration practices. Trustees must regularly assess the trust’s financial health, investment strategies, and compliance with regulatory requirements.
An Experienced Estate Planning Attorney in San Diego
Would you like to have a knowledgeable California estate planning lawyer help you set up a trust or provide you with more information about the primary duties of a trustee? If so, please don’t hesitate to get in touch with the team here at the Semanchik Law Group. We have been guiding local families through the estate planning process for years, and we would love to do the same for you.
To arrange a free consultation with a member of our skilled legal team, all you need to do is give us a call at (619) 535-1811 or contact us online. We look forward to working with you!
