If you are setting up a trust, one of the most important decisions you will make is who to name as your trustee. A trustee is the person or institution responsible for managing the assets you place in the trust and following the instructions you outline in the trust document. This role carries serious responsibilities, and the person you choose must be capable of acting in the best interests of your beneficiaries.
A trustee is more than just a title. This role involves legal and ethical obligations, including the duty to act with loyalty, care and transparency. Understanding what a trustee is expected to do can help you make an informed decision about who should fill this role and how your trust will be administered.
Key responsibilities every trustee must fulfill
When you set up a trust, your trustee will be responsible for carrying out the following duties:
- Follow the trust’s instructions: The trustee must carry out your wishes as stated in the trust document. This includes how and when to distribute funds or manage property.
- Act in the best interest of the beneficiaries: Trustees are required to act with loyalty to the beneficiaries. They must avoid conflicts of interest and cannot use trust assets for personal benefit.
- Manage and protect trust assets: Whether the trust includes real estate, investments or other property, the trustee is responsible for preserving and managing these assets responsibly.
- Keep thorough records: Trustees must track all financial activity related to the trust, including distributions, income and expenses. These records may be shared with beneficiaries upon request.
- Communicate with beneficiaries: Trustees should keep beneficiaries informed about the trust’s status and be available to answer reasonable questions.
- Handle taxes and legal filings: The trustee is responsible for filing any required tax returns and fulfilling other reporting obligations.
If you are uncertain about who to name as trustee, legal guidance can help you evaluate your options and create a trust that supports your goals while protecting your beneficiaries.