If you've been named to serve as trustee, these guidelines provide an overview of some of the duties you would generally be expected to perform. Acting as a trustee is complex and time-consuming and you may be personally liable for the actions you take in the role. Additionally, it may be a good idea to consider family relationships and whether you will be able to make objective decisions and take actions in the best interest of the trust and beneficiaries.
Ask a professional to help you understand your options and decide how to best proceed. For information on how Fidelity may be able to help, see Personal Trust Services. If you determine that you would rather not be a trustee, review the successor trustee language in the trust document to determine if a successor is already named or what is required to appoint one.
Chat with a representative. Find an Investor Center. Fidelity does not provide legal or tax advice. The information herein is general and educational in nature and should not be considered legal or tax advice. Tax laws and regulations are complex and subject to change, which can materially impact investment results.
Fidelity cannot guarantee that the information herein is accurate, complete, or timely. Fidelity makes no warranties with regard to such information or results obtained by its use, and disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information.
Someone close to you will have the obvious benefit of knowing and understanding your family dynamics. Be sure he or she is willing to take on the task. If you have a long-standing relationship with your attorney, another benefit is he or she will have insight to your family. Keep in mind, this may cost more, which could ultimately reduce the amount your beneficiaries will receive. Trust Company - Hiring a Trust company can be a great solution for many reasons. A Trust company will be able to take a stern, matter-of-fact approach to your estate, saying no when necessary and safeguarding your legacy as they see fit per the discretion and guidance of the Trust.
The ultimate goal of any Trust is to protect your legacy. Trustees will be required to do some or all of the following:. Act as a fiduciary: The role of fiduciary means one is held to a high standard in terms of protecting the investments and distribution of the Trust. Some even feel that a Trustee must pay more attention to the Trust than they do his or her own personal accounts.
Understand the terms of the Trust and ensure safety of assets: Assets within a Trust must remain safe, so a Trustee should understand the basic terms outlined in the Trust. Invest assets when necessary: If the Trust dictates, a Trustee should invest assets with the intention of preserving them now and in the future. Make ongoing decisions: As needed, Trustees should be willing and able to make decisions about how and when beneficiaries receive payment, as well as decide on other provisions of the trust.
Keep in mind that these decisions are with respect to discretionary powers given to a trustee. That's mandatory, so the trustee really doesn't get any say in it or at least not much. But, our Trust also says the trustee may give additional distributions as needed. If the assets are to stay in a trust for minors, for a surviving spouse, for tax purposes, or if the beneficiaries will receive their inheritances in installments , each trust will need a new tax identification number, and proper bookkeeping and reporting procedures will need to be established.
Yes, trustees are entitled to reasonable compensation for their services. The trust document should give guidelines. Consider hiring an attorney, bookkeeper, accountant, or corporate trustee to help you. A corporate trustee can manage the investments and do the record-keeping. If you feel you cannot handle any of the responsibilities due to work, family demands, or any other reason, you can resign and let the next successor trustee step in.
If no other successor trustee has been named, or none is willing or able to serve, a corporate trustee can usually be named. Remember, just because the grantor nominates you to serve as trustee does not mean you have to accept the trustee position. If you do not wish to serve, the attorney assisting with the administration of the trust may ask you to sign a document in which you officially decline to serve as trustee.
This declination document will allow the next trustee in the trustee succession line to assume the role of acting trustee. Duties and Responsibilities of a Trustee. November 5, Successor trustees can relax a bit because they do not need to do anything right now. Successor trustees only begin to act when the trustee of a trust dies or becomes unable to manage financial affairs due to incapacity.
If you have been named as a trustee, you may already be acting in this capacity. In either case, it is important that you understand your duties and responsibilities. Who are the people involved with a living trust?
What is a trust? How does a living trust work? What do I need to know now? What responsibilities will I have as a trustee? For example, you must follow the instructions in the trust document: You cannot mix trust assets with your own. You cannot use trust assets for your benefit unless the trust authorizes it. You must treat trust beneficiaries the same; you cannot favor one over another unless the trust says you can.
Trust assets must be invested in a prudent conservative manner, in a way that will result in reasonable growth with minimum risk.
You are responsible for keeping accurate records, filing tax returns, and reporting to the beneficiaries as the trust requires. Do I have to do all of this myself? How will I know if the grantor is incapacitated? What do I do if the grantor is incapacitated? What happens if the grantor recovers? What do I do when the grantor dies? Keep in mind that the Trustee is not the same thing as the Trust beneficiary.
The Trustee does not receive the Trust assets unless the Trustee is also named as a beneficiary. And the Trustee does not have the right to change the Trust terms in most cases. Instead, the Trustee must manage the Trust assets according to the Trust documents. Eventually, the Trustee must also distribute the Trust assets as provided in the Trust document. Executors are people named in a Will to manage the probate estate after a decedent dies.
However, unlike a Trustee, an Executor cannot begin acting until they first obtain a court order. By the way, when a person dies without a Will their probate estate can still be opened, but the person appointed to manage the estate is called an Administrator rather than an Executor.
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