Whether you’ve been asked to be the trustee of a loved one’s trust or you’re in the process of choosing someone to act as your own trustee, it helps to understand what is expected of a trustee. Westlake Village trust attorneys will tell you that being a trustee involves a lot of responsibility, often on both a short-term and long-term basis. Keep in mind that a trustee can enlist the aid of professionals including attorneys and accountants.
Before digging into the responsibilities of a trustee, let’s start with a quick summary of what a trust is. A trust is a legal document that places certain assets in control of the legal entity of the trust. The property and assets placed into the trust are owned by the trust and managed by the trustee.
It’s important to remember that even though a trustee has control over the assets in the trust, it does not become their property, nor can they do whatever they want with it. Distribution and management of the assets are dictated by the rules of the trust agreement and other estate documents. The trustee has a duty to make sure that those rules are carried out correctly.
The key responsibility of a trustee is to act in the best interest of the trust and its beneficiaries. Management and distribution of the assets need to be accurate, documented, and done in accordance with the terms of the trust agreement. All of this remains the responsibility of the trustee, with or without the assistance of legal or financial professionals.
Another essential responsibility of the trustee is the filing and payment of the taxes for the trust. If any of the property or assets under the trust is generating income, that income will need to be reported to the Internal Revenue Service by the trustee. It is also up to the trustee to make sure that any related property taxes are paid.
Obviously, the duties of a trustee should not be taken lightly. They should be placed in the hands of someone trustworthy and capable of handling them. If you’ve been chosen to act as a trustee, it’s important to be honest about your ability and willingness to take on the role.
The creation and ultimate administration of a trust can be complicated. If you need assistance with any aspect of trust planning, our Westlake Village trust attorneys are here to help. Simply call our law firm at (805) 409-3878 to schedule a consultation.