You’ve been honored with the responsibility of being named a trustee by a family member. While it is a significant vote of confidence, the role of a trustee comes with important duties and obligations. We understand that stepping into this role can be overwhelming and may leave you wondering where to start. Our incredible team can provide you with the knowledge and assistance you need to navigate your trustee responsibilities with confidence and ease.
As a trustee, your primary duty is to preserve and protect the assets held in the trust. It is crucial to keep the trust assets separate from your personal or any other assets to avoid commingling. Additionally, trustees are responsible for making distributions to beneficiaries as outlined in the trust document. Reviewing the language regarding beneficiary distributions is essential to ensure compliance with the trust’s intentions. While it is important to fulfill beneficiaries’ needs, trustees may need to make difficult decisions and say “no” if it aligns with the trust’s provisions.
To maintain transparency and accountability, trustees must diligently keep records of all financial transactions, including income, expenses, and distributions. Effective communication with beneficiaries and others involved is also vital. Regular reporting is necessary to keep beneficiaries informed about the trust’s status and progress
Each trust is unique and created for specific purposes. As a trustee, it is essential to thoroughly understand the trust document to monitor key events, such as beneficiaries reaching certain ages or the death of the grantor. By comprehending the trust’s purpose, trustees can correctly administer the trust and act in its best interests. You can learn more about the different types of trusts in our article here.
Trustees must treat each beneficiary impartially unless the trust document specifies otherwise. This impartiality applies to both current income beneficiaries and remainder beneficiaries. For trusts that are intended to benefit individuals with special needs, trustees need to understand the beneficiaries’ current benefits and the specific type of special needs trust (first or third party) in place.
Trusts are separate legal entities and may require filing federal and/or state tax returns. Trustees may also need to provide tax forms for beneficiaries to include in their personal tax returns. While the tax obligations may seem daunting, trustees have the right to seek assistance from professionals, such as accountants, attorneys, financial advisors, and fiduciary specialists, to fulfill these duties.
Navigating trustee responsibilities can be complex, but you don’t have to do it alone. At Rudman Winchell, our attorneys are here to provide you with expert legal services, in combination with our affiliate, Maine Fiduciary Services (MFS), who offer professional guidance in trust administration duties. Our experienced team can help you better understand your duties as a trustee, answer your questions, and ensure you fulfill your responsibilities accurately and efficiently.
Being named a trustee is an honor that comes with significant responsibilities. Understanding your duties, maintaining impartiality, and seeking professional assistance when needed are key to successfully fulfilling your role as a trustee. At Rudman Winchell, we have joined forces with Maine Fiduciary Services to offer you comprehensive support as you navigate your trustee journey. Don’t hesitate to contact us for trust administration assistance, expert advice, or to delegate some of your duties if needed. Let’s work together to ensure your trust is administered effectively, benefiting the beneficiaries and honoring the trustor’s intentions.
Call us today to discuss your trustee needs and learn more about the services we provide.