A trustee is an individual or entity appointed to manage a trust on behalf of its beneficiaries. As such, being a trustee comes with significant responsibilities in order to fulfill their duties. What are the duties of a trustee in administering a trust?
A trustee’s primary responsibility is to manage the trust’s assets in accordance with the trust agreement. The trustee has a fiduciary duty to act in the best interests of the trust’s beneficiaries at all times. This can include investing assets in an appropriate manner by diversifying to avoid risk while considering the potential return on each investment decision. If the trustee does not feel like they can do this independently, they have the duty to hire an investment professional on behalf of the trust.
Because the trustee acts on behalf of beneficiaries, accurate and thorough records of all trust transactions are required. Records must be kept on all trust assets, including income the trust takes in and expenses that go out. The trustee must provide regularly updated reports to the beneficiaries in order to maintain transparency on the status of the trust.
Generally, the purpose of a trust is to distribute assets to the appropriate beneficiaries. The trustee is responsible for doing so in accordance with the trust agreement. Distributions must be given in a fair and neutral manner, considering the needs and unique situations of each beneficiary. If specific instructions were left by the creator of the trust as to distributions, the trustee typically must follow them.
Although a trust leaves little margin for interpretation, disputes between multiple beneficiaries can arise. The trustee must maintain their neutral position as they act to resolve disputes in a way that accounts for the best interests of all beneficiaries.
If you are a trustee of a trust and need help administering the trust, call the trust administration lawyers at Brown Law Firm, LLC at 303-339-3750 to set up an appointment to discuss your situation.