The number of people reporting some sort of estate planning has decreased by more than 20 percent in the last few years, according to an annual survey conducted by Caring.com, a leading assisted living and homecare referer.
So it’s no surprise that many people are unfamiliar with the trust process and trustee duties.
One of the most important reasons to set up a trust is to guarantee that your children will receive their inheritance free from excessive estate taxes, long probate times, and protected from creditors.
In the following article, we will discuss the nature of trusts and the responsibilities and duties of a trustee — the person who manages a trust.
Trusts and Trustee Duties
A trust is a legal condition or entity that can own and possess assets. A trust is like a will, except a last will also names guardians for your children, states your final wishes, and determines your estate’s executor.
A trust focuses on your financial holdings and assets and can be distributed during your lifetime if you become incapacitated.
Trusts, or contracts the dictate that one person takes care of another, are managed by a trustee. This trustee has some unique responsibilities under the law.
Once the trustee takes up the trust invitation from the settlor, they cannot then decide not to do the job. Unless all the benefactors agree or the court removes them, the trustee has to fulfill their duties. Also, the trustee has a fiduciary duty to act in the beneficiaries’ best interests. The trustee can find themselves in legal difficulties if wrongdoing is alleged.
In general terms, the primary duties of a trustee fall under three headings -investment, administration, and distribution. With those broad strokes in mind, here are a few specific responsibilities:
- Carry out the trust according to the contract’s wording
- Not delegate the trust’s duties to another party, unless the trust permits
- Manage the assets of the trust with some degree of competence
- Act in the best interests of the beneficiaries
- Preserve and protect the trust to the best of their abilities
- Keep the trust separate from the trustee’s assets
- Make the trust as productive as possible for the betterment of the beneficiary
Originally published at https://www.obryanlaw.com on October 12, 2020.