What Does a Trustee Do Anyway?

If a loved one asks you to act as a trustee of their trust, it is because they trust you to be able to handle their affairs in their place. They believe you can exercise strong, fair, and independent judgement when necessary. Although the position of trustee can be a whirlwind of responsibilities and duties, we’ll do our best to summarize what you need to know so you can carry out this important role.

The first thing to understand is what the legal responsibilities of the trustee are. First and foremost, your actions are bound and dictated by the terms of the trust. It would be well worth your while to read through the trust (or have an attorney go through the trust with you) to understand your specific duties. Those duties usually include:

Distributing the trust property to beneficiaries according to the terms of the trust.

Filing the trust tax return and the deceased’s final tax return.

Managing the assets in the trust (for example; investing, selling, and distributing).

Keeping records and accounting to the beneficiaries on at least an annual basis or upon distribution and providing information to them upon request.

Paying for trust expenses (such as funeral costs, last expenses, legal and accounting fees).

The second thing to understand is that as a trustee, you owe a duty to the beneficiaries of the trust to act in their best interest, as opposed to your own best interest. This duty does not supersede, however, the obligation of carrying out the terms of the trust. Difficulties may arise if there is a difference between the desires of a particular beneficiary and the deceased individual’s wishes.