If one of your loved ones asks you to manage his or her trust, you may feel honored and thankful. Being a trustee is a major responsibility. Someone you love and appreciate chooses you to oversee and administer his or her precious assets and wealth.
Even if you are financially adept and responsible, you may have some difficulty understanding all the duties of being a trustee. Here are some core guidelines for fulfilling your obligations as a trustee.
1. Fully understand the document
A trust document is full of details, specifications and stipulations. It may be even more complex if any of these factors apply to your situation:
- The estate is large
- There are many beneficiaries
- The trust has a specific purpose, such as caring for a relative with special needs
You will need to analyze the document many times over to ensure you grasp every last detail of it.
2. Meet with other important parties
There may be other pertinent individuals involved with the trust, including the following:
- Co-trustees
- CPAs
- Investment advisors
- Lawyers
Identify these people and meet with them to ensure everyone is on the same page.
3. Keep good records
Your core responsibility as a trustee is to manage money and assets in a manner that benefits the beneficiaries. Because of this, you must adhere to a high recordkeeping standard. Having good intentions and acting honestly is not enough if you cannot account for every action you take and dollar you spend. Make sure you have stringent documentation to support everything you do.
Acting as a trustee can be stressful, especially if heirs question your decisions. You may encounter estate disputes and trust litigation as you try to fulfill your role. But being a trustee can also be a rewarding experience.