Being asked by a family member or close friend to serve as trustee for their trust upon their death can be an incredible honor. At the same time, serving as a trustee can be a massive responsibility—and the role is not for everyone.
In fact, depending on the type of trust, the assets held by the trust, the specific terms of the trust, and the named beneficiaries, the job can require you to fulfill a wide range of complex (and potentially unpleasant) duties over the course of many years. In addition, trustees are both ethically and legally required to properly execute those duties, or face liability.
Given this, agreeing to serve as trustee is a decision that should not be made lightly. Sometimes the best thing you can do for everyone involved is to politely decline the job. Remember, you do not have to take it. Depending on who nominated you, declining to serve may not be an easy or practical option, or you might enjoy the opportunity to be a trustee if you understand what it entails.
It is best to make your decision about serving as trustee with eyes wide open. The following is a brief look at what the job will likely entail, along with some situations where you might want to seriously think twice about agreeing.
What trustees do
A trustee’s duties can vary depending on the size of the estate, the type of trust, and the trust’s specific instructions. Every trust comes with a few core requirements, primarily revolving around accounting for, managing, and distributing the trust’s assets to its named beneficiaries.
Regardless of the type of trust or the assets it holds, some of a trustee’s key responsibilities include:
- Identifying and protecting the trust assets
- Determining what the trust’s terms actually require you to do
- Managing the trust assets for the term specified and distributing them properly
- Filing income and estate taxes for the trust
- Communicating regularly with beneficiaries
- Being honest, highly organized, and keeping detailed records
- Closing the trust when the trust terms specify
Ultimately, trustees have a fiduciary duty to properly manage the trust in the best interest of all the trust beneficiaries. Consult with me for more in-depth details regarding the duties and responsibilities a specific trust will require of you as trustee.
Can you get help?
Generally, you are not expected to take on the responsibility of trustee by yourself. Often, trustees are granted permission in the trust to seek assistance from outside professionals to fulfill their duties. Remember, you do NOT need experience in law, finance, or taxes to serve as trustee. And while you will not be able to profit from the job, you are able to be paid for your role as trustee.
Many trustees, especially family members, choose not to accept any payment beyond what’s required to cover the trust expenses. Yet, this all depends on your personal situation and relationship with the trust’s creator and beneficiaries and, of course, the nature of the assets in the trust. In either case, you will not have to use your own funds to get the job done.
Signs the trustee role might be a bad idea
Given the sense of loyalty and responsibility that is often involved, it might feel difficult to turn the trustee role down. But for a number of reasons, saying “no thanks” can sometimes be the best decision, not only for you, but for all parties involved.
This is an entirely personal decision and one you will ultimately have to make for yourself after considering all of the factors. The following are examples of red flags that can signal the role might be better fulfilled by someone other than you:
- Your job, family, and/or health situation is such that you will not be able to give the job the time and attention it deserves. Some trusts can require far more work than others, and if the role would seriously impede your own life, you might consider declining.
- You do not get along with the beneficiaries. If there are underlying conflicts or bad blood with the people you’ll be required to serve, this could make the job incredibly difficult and unpleasant for everyone.
- The trust’s terms are vague and/or unclear, leaving you in the position to make difficult decisions you do not feel qualified to make. Such grey areas are especially troublesome when it comes to distributing trust assets to young adult beneficiaries, who might not be the most responsible with their spending and/or lifestyle.
- It is not clear exactly what assets the trust creator (grantor) owned, and/or the estate is highly unorganized. Tracking down and managing unorganized and/or poorly funded assets can be a massive undertaking—and potential liability.
- Lawsuits are likely or already underway. As trustee, it is your duty to defend the trust against lawsuits, and just doing this can be a huge expenditure of your time and energy. If a lawsuit against the trust is successful, it could seriously reduce the trust’s value, making your job more challenging.
I can help you decide
Given the serious nature of a trustee’s responsibilities, you can meet with me as your Personal Family Lawyer® for help deciding whether or not to accept the job. I can offer a clear, unbiased assessment of what will be required of you based on the specific trust’s terms, assets, and beneficiaries.
And if you do decide to accept the trustee role, I can guide you step-by-step through the entire process, ensuring you effectively fulfill all of the grantor’s wishes with minimal risk. Serving as trustee can be a lot of work, but if you go into the job with eyes wide open and have the proper guidance, it can be an immensely rewarding experience.
Contact me today to learn more!