Being a trustee comes with many responsibilities. You may have concerns about it being overwhelming. As a trustee, you have a legal duty to carry out the terms of the trust. While acting as a trustee is not for everyone, there are some guidelines you can follow to make it easier.
Here is some advice for administering a trust.
1. Review the document
You want to have a strong understanding of the trust agreement, which sets out important rules for you. It will also spell out how beneficiaries should receive assets.
2. Communicate with beneficiaries
Work to develop friendly relationships with the beneficiaries. The more you get along with beneficiaries, the easier your role will be. Follow this checklist:
- Communicate with beneficiaries early and inform them about your role
- Give them an idea of how long the trust administration process will take
- Issue statements of accounts
- Send tax reports
The beneficiaries may not understand the trust administration process. Talk with them consistently to alleviate their anxieties.
3. Invest wisely
Depending on the terms of the trust, you may have a duty to invest trust funds. The purpose of investing trust assets is to preserve assets for all beneficiaries, current and future. You may want to diversify the assets among fixed income securities and stocks.
4. Avoid conflicts of interest
Chances are the beneficiaries are already anxious or suspicious about your role of a trustee. You do not want to stoke their fears by doing anything that appears dishonest or shady. Never utilize the trust for your personal benefit. If you use the trust to enrich yourself, the beneficiaries may try to remove you.
5. Get advice
You will likely run into issues or questions that you will not find answers to in the trust document. When this happens, make sure you seek professional assistance.
You may not be sure you have what it takes to be a trustee, but these guidelines will help you fulfill your duties.