Not long ago, your relative told you that he chose you as the trustee of his trust. You are not sure what being a trustee means, and you don’t know what your responsibilities are. Maybe your relative is in poor health now or has recently passed away. What should you do?
- Find a Copy of the Trust Document
If your relative said that you are the trustee, then you are likely named in a trust document. This is a legal document explaining how the trust will run. You should ask your relative or whoever is handling his estate to give you a copy. If you cannot find a copy or your relatives refuse to hand it over, you may need a lawyer’s help or the help of the probate court to proceed.
- Read the Trust Document or Have a Lawyer Help
You will want to review the entire trust document to begin understanding your duties. The document should explain who benefits from the trust (the “beneficiaries”) and if you have any co-trustees or successor trustees. It will have more information about how the trust should run. In addition, you have legal obligations as a trustee that are not usually spelled out in the trust document. To understand these legal obligations, you may wish to have a consultation with a local lawyer who can help.
- Understand the Basics of a Trustee’s Duties
Trustees manage a trust’s assets for the benefit of beneficiaries. The trust creator (also called a “settlor”) transfers ownership of assets to you as trustee. Then you need to invest or take care of the assets. At appropriate times (often listed in the trust document), you make distributions of interest income, earnings, or principal from the assets to the beneficiaries.
Because you are holding onto the trust assets for someone else, you have a duty not to use the assets for your own self-interest. You also need to treat all the beneficiaries similarly, without favoring anyone. Your most important duty may be the duty to invest the assets prudently. This may require getting help from an investment professional.
Being a trustee can be a big job depending on the size and value of the trust’s assets. If you are ready to take it on, be sure to educate yourself about your many duties. Talking to a lawyer is always a good idea too.
Need help understanding your duties as a trustee? Local attorney Andrew Szocka, Esq. provides thorough and speedy estate planning help in the Chicagoland area. To schedule a free initial consultation, visit the Law Office of Andrew Szocka, P.C. online or call the office at (815) 455-8430.