What are trustee duties and responsibilities? A trustee is the person who safeguards and manages the trust property for the benefit of the beneficiaries. These duties can involve signing a stock vote, filing a tax return, or investing money, among other things. It is important to fulfill trustee duties well, because under the law a trustee has a very high fiduciary duty. This means that trustees are held accountable for how well they perform their trustee duties.
Trustee duties are spelled out in the trust document and so are different for every trust. When you become a trustee, make sure to scan the trustee section of the trust. In addition to following any specific instructions found therein, some important duties required of every trustee include the following:
General Trustee Duties
- Put together a team of advisors and use their expertise
- List and manage inventory assets
- Collect benefits and reinvest or distribute according to terms in trust
- Invest trust assets in a prudent (conservative) manner- investments should have reasonable growth with minimum risk
- Keep accurate records
- Prepare reports for beneficiaries as directed
- File tax returns
- Distribute benefits and assets to beneficiaries as trust directs
- Treat all trust beneficiaries by the same standard
- do not play favorites!
- Pay bills
- Do final accounting
- Never mix personal assets with the trust assets
- keep the trust checking accounts and investments separate from your own
- Never use trust assets for your own benefit unless the trust indicates doing so
Additional Trustee Duties Tips
I am a trustee of several trusts and every year at tax time, as part of my trustee duties, I need to sign tax returns in my capacity as trustee. Whenever you sign as a trustee you should remember to put the word trustee or the letters TTEE after your signature. These letters are an abbreviation for trustee. It alerts folks to the fact that you are signing in the capacity of trustee, not for yourself.
When you write the name of the trust you should remember there are three parts to the name of your living revocable trust. First is the actual name on the document, for instance “The Saveme Trust.” Second is the date the trust was signed, with the words “under agreement 2/14/99” or U/A 2/14/99 or Dated 2/14/99 . Third is the trustee’s name, because technically they own the trust.
If you are asked to serve as a trustee, it is a compliment to you. Those who ask you to act as such respect your abilities and integrity. If you are asked to serve as trustee remember that while it is a big task, it will provide a real service to the person who asked you. Having a family member or close friend serve as trustee can save the cost of hiring a professional trustee, while giving the peace that comes from knowing that the person in charge has a personal interest in settling the trust.Lee R. Phillips President, LegaLees Corp.