Creating a comprehensive estate plan that addresses all of your estate planning goals and objectives requires you to utilize a variety of estate planning tools and strategies. Among the most popular of those estate planning tools is a trust. If you decide to incorporate a trust into your estate plan, one of the most important decisions you will need to make when creating your trust is who to appoint as the Trustee of the trust. A Trustee has a wide variety of duties and responsibilities that are best handled by someone with a legal and/or financial background. In any event, before you decide on your Trustee, it is important that you have at least a basic understanding of what is required of a Trustee during trust administration. Toward that end, the estate planning attorneys at The Mendel Law Firm, L.P provide answers to some frequently asked questions about trust administration. If you have additional questions or concerns, please feel free to contact our office to schedule an appointment.
What is a trust?
- Settlor – the person who creates the trust. A Settlor may also be referred to as the Grantor or Maker of the trust.
- Trustee – an individual or entity that administers the trust terms as well as manages and invests the trust assets.
- Beneficiary – a beneficiary is the person, entity, or even family pet that receives the benefit of the trust assets. A trust may have both current and future beneficiaries.
- Terms – created by the Settlor and may be anything that is not illegal or unconscionable.
- Funding – almost anything of value can be used to a fund a trust, including cash, securities, and real property.
What are the different types of trusts?
Who chooses the Trustee?
What does a Trustee do?
- Following all trust terms unless they are illegal, impossible to fulfill, or unconscionable.
- Understanding an furthering the trust purpose as stated by the Settlor.
- Communicating with beneficiaries.
- Mediating conflicts among beneficiaries.
- Investing trust assets using the “prudent investor” standard.
- Managing trust assets.
- Distributing trust assets according to the trust terms.
- Making discretionary decisions, if applicable.
- Keeping trust records.
- Preparing and filing trust taxes.
- Defending the trust against legal challenges.