What Is a Trustee and What Are Their Duties?
A trustee is a person or entity (such as a corporation) formally appointed to manage the assets (real estate, retirement accounts, etc.) of a trust; the trustee does this for the benefit of the beneficiaries of the trust.
It’s common in families for parents to appoint one or more of their kids to be trustees.
What Is a Trust?
In trusts and estates law, a trust is a fiduciary relationship (meaning a relationship involving trust) in which one person (the trustor) formally gives another person (the trustee) the right to hold assets on behalf of a beneficiary or beneficiaries.
One of the main goals of creating a trust is to avoid probate, which is the process by which a deceased person’s estate is distributed to heirs and designated beneficiaries; the probate process also handles paying off creditors.
While ultra-wealthy families might come to mind when you hear the word trust, they’re not just for rich people—trusts are a useful way to manage assets for people of different wealth levels.
Is an Executor the Same as a Trustee?
No. An executor carries out a person’s wishes as outlined in their will. They are responsible for settling the estate, initiating court procedures, filing the deceased person’s tax returns, and distributing assets to beneficiaries, among other duties.
A trustee, on the other hand, is responsible for managing assets that will be held in an ongoing trust (in other words, assets that will not be immediately distributed), communicating with beneficiaries, and filing ongoing tax returns, among other duties.
Often the executor and the trustee are the same person. This is why many professionally drafted wills reference an “executor(s)” early on and then later mention a “trustee(s).”
What Are the Duties and Responsibilities of a Trustee?
Trustees have several duties and powers. First and foremost, they must act in accordance with the terms of the trust and the law. Other duties and responsibilities include:
• Understanding the terms of the trust, including who the beneficiaries are
• Ensuring trust assets are safe
• Investing the trust assets to ensure assets are productive for current and future beneficiaries
• Distributing trust assets in accordance with the trust agreement
• Making decisions, such as when beneficiaries are to receive payments
• Filing tax returns as needed and keeping records of statements, tax returns, and other documents
• Communicating regularly with beneficiaries and providing them with statements of accounts and tax reports
Trustees have a duty to act in the interests of the trust’s beneficiaries, to act with reasonable care, and to not personally profit from the trust. A trustor can appoint a family member (such as a child or sibling) or hire a professional trustee, who, legally, can charge for their services.
A trustee plays a vital role in managing a person’s estate after they die. It’s a big responsibility. An estate planning attorney can help you understand in more detail the duties of a trustee.
Get Expert Help with Estate Planning and Probate Administration
Navigating trusts and estates law and understanding the duties and responsibilities of trustees and executors is challenging. We can help.
Joseph A. Ledwidge PC is an expert New York probate attorney representing executors, fiduciaries, heirs, beneficiaries, and other interested parties. He and his associate counsel have 32 years of combined experience and can help you avoid probate through the skilled use of trusts and other means.
Call us for a no-obligation consultation today at (718) 276-6656. We serve clients throughout the state, including Jamaica, NY, Queens, NY, and Brooklyn, NY.
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