Being a trustee comes with a mix of feelings. An individual or couple chose you for specific reasons. They consider you loyal, trustworthy and capable of the job. You probably feel honored by the role, but also unsure of what the role entails.
Like any job, preparation is the key to success. Since you will be managing their trust, its necessary to be aware of the responsibilities and duties that go with such an important position.
Duties and responsibilities
A trustee has important financial responsibilities, such as management of trust assets, distribution of assets, and sub trust funding for minors and special needs individuals.
The foundation of your duties as a trustee is loyalty. You want to avoid conflict of interest. For example, if you sold trust property on the beneficiarys behalf, and the buyer turns out to be a friend. Self-dealing can occur if you use trust property to benefit yourself rather than the beneficiaries. Trustees should steer clear of self-dealing and conflict of interest in case of legal issues.
In California, a trustee is required to act prudently when making trust decisions. This means you are expected to deal with trust property just as you would deal with your own. It takes a certain level of skill, care and research.
Another important duty is to act with impartiality. Actions involving trust property shouldnt favor one beneficiary over the other. This can get tricky when a beneficiary wants to invest their share differently than the next. Your job is to preserve the income for final distribution.
Managing a trust is a difficult and important part of a trustees role. More challenges can arise when dealing with beneficiaries. Oftentimes, there are multiple beneficiaries. Each one has their own interests in mind. This can stir up disputes, which is just another complex problem added to your plate.
Beneficiaries can also sue for damages if a trustee breaches his or her duties.
The purpose of a trust is to create financial security for the beneficiaries. A trustee is strapped with duties and responsibilities to ensure all goes smoothly. Unfortunately for most trustees, these tasks are foreign, and mistakes could result in crippling consequences. If you are a trustee and feel overwhelmed, an experienced attorney can help with the process.