Trustee Duties And Responsibilities

Some people, when approached by a close friend, family member, or even a colleague, might initially experience a kind of sinking feeling, because he may already know that anyone who acts as a trustee in a living trust situation cannot also be a beneficiary. Once the initial disappointment has worn of, feelings of love and respect will help one look upon this awesome responsibility with pride.

Increasingly, as the advantages of establishing a living trust is becoming increasingly well known and cost effective, the majority of people establishing the trust act as their own trustee initially. They will probably only have approached you to act as a successor trustee in the event that they become incapacitated and are unable to manage their financial affairs including their living trust. Something that you wish that not to happen for many years to come.

All that will probably have happened in the initial stage of foundation of a living trust is for all the trustor's assets are transferred to it. Any property titles must be changed from the trustor's name to the name of the trust. The legal significance of this is that the active trustor has right to handle the dispersal of trust. When the day dawns that the management of the trust passes into your capable hands, you will have to assume full responsibility of handling its financial affairs.

You may be concerned or even relieved to know that your friend, now incapacitated, has named at least one other successor trustee to take your place in the event that you too become incapacitated or are unable to carry out your duties for any other reason.

In any event, at various stages you should consult with your friend the trustor to discuss the state of the trustor, and its assets. The trustor is not obliged at this stage to go into great depth as to the current value of the estate. You need to be aware of where the information can be accessed in the event of their sudden incapacitation. You are entitled to know if there are other successor trustees, if so, who they are and where they can be contacted.

When the sad day dawns that you life long friend becomes incapacitated you will again recall that feeling of the responsibility that you felt when he first approached you and asked you to become his trustee. You will have to remember when you step in as trustee is that you have been given the role of safeguarding someone else's personal property, the accumulations of his life work on his behalf. For your friend, his family and his beneficiaries.

As a trustee, you have certain responsibilities to follow strictly the instructions clearly stated in the trust document on how to manage the state. To manage the estate as if it was your own, with responsibility and respect. To manage its fiscal affairs properly and prudently, to maintain records and encourage growth without taking unreasonable risks. If there are areas that you feel you cannot handle, you are responsible to bring in professional help. This can mean accountants, lawyers, and investment advice. If running the trust is time consuming, you will be entitled to expect to be able to draw some form of salary or fee from the trust. This should be properly recorded in the trust records.

Hopefully your friend will recover from his incapacitation and resume his duties, leaving you a little wiser. Sadly if he does not recover and passes on, then your final responsibility will be arrange for the dispersal of the trust, making sure that the beneficiaries receive their share of the estate as your friend would have wished.