• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • Home
  • BLOG
  • Newsletters
  • Reviews
    • Our Reviews
    • Review Us
  • Videos
  • Contact Us
  • WhoWe Are
    • A Message From Mark Costley
    • Meet Our Team
    • Communities We Serve
  • WhatWe Do
    • Advanced Estate Planning
      • Asset Protection
      • Business Succession Planning
      • Charitable Giving
      • Family Foundation
      • Family Limited Partnerships
      • Grantor Retained Annuity Trust
      • Irrevocable Life Insurance Trust
      • Planning For Charitable Gifts
      • Special Needs Planning
    • Counseling Non-Profits
    • Elder Law and Special Needs Planning
    • Estate and Gift Tax Planning
    • Estate Planning
    • Power of Attorney
    • Probate & Trust Administration
    • Process
    • SECURE Act
    • Social Entrepreneurship & Business Law
  • WhyWe Do It
    • Peace Of Mind
  • Resources
    • Caregiving Resources
      • Caregiving Worksheets
      • Our Book
    • Definitions
    • Elder Law Reports
    • Estate Planning Resources
      • Estate Planning Articles
      • Estate Plan Checkup
      • Estate Planning Reports
      • Is Your Estate Plan Outdated?
      • Top 10 Estate Planning Techniques
    • Frequently Asked Questions
      • Elder Law
      • Estate Planning
      • Estate Planning for Parents
      • FAQs for Families Without an Estate Plan
      • Divorce and Your Estate Plan
      • Estate Planning for Women
      • Estate Planning 101
      • Legacy Wealth Planning
      • LGBTQ Estate Planning
      • Nursing Home Planning
      • Spliter
        • Philanthropy and Your Estate Plan
        • Planning for Dementia
        • Probate
        • Serving as Executor
        • Special Needs Planning
        • Tax Avoidance Planning
        • Trust Administration
        • Trust Administration & Probate
        • Social Security Retirement System
        • Will Contests
    • Pre Consultation Form
    • Probate Resources
      • Chapel Hill Probate
      • Raleigh Probate Resources
    • Professional Resources

Clarity Legal Group

Estate Planning Information Center

919-484-0012 Schedule Consultation
Attend a Free Seminar
  • WhoWe Are
    • A Message From Mark Costley
    • Meet Our Team
    • Communities We Serve
  • WhatWe Do
    • Advanced Estate Planning
      • Asset Protection
      • Business Succession Planning
      • Charitable Giving
      • Family Foundation
      • Family Limited Partnerships
      • Grantor Retained Annuity Trust
      • Irrevocable Life Insurance Trust
      • Planning For Charitable Gifts
      • Special Needs Planning
    • Counseling Non-Profits
    • Elder Law and Special Needs Planning
    • Estate and Gift Tax Planning
    • Estate Planning
    • Power of Attorney
    • Probate & Trust Administration
    • Process
    • SECURE Act
    • Social Entrepreneurship & Business Law
  • WhyWe Do It
    • Peace Of Mind
  • Resources
    • Caregiving Resources
      • Caregiving Worksheets
      • Our Book
    • Definitions
    • Elder Law Reports
    • Estate Planning Resources
      • Estate Planning Articles
      • Estate Plan Checkup
      • Estate Planning Reports
      • Is Your Estate Plan Outdated?
      • Top 10 Estate Planning Techniques
    • Frequently Asked Questions
      • Elder Law
      • Estate Planning
      • Estate Planning for Parents
      • FAQs for Families Without an Estate Plan
      • Divorce and Your Estate Plan
      • Estate Planning for Women
      • Estate Planning 101
      • Legacy Wealth Planning
      • LGBTQ Estate Planning
      • Nursing Home Planning
      • Spliter
        • Philanthropy and Your Estate Plan
        • Planning for Dementia
        • Probate
        • Serving as Executor
        • Special Needs Planning
        • Tax Avoidance Planning
        • Trust Administration
        • Trust Administration & Probate
        • Social Security Retirement System
        • Will Contests
    • Pre Consultation Form
    • Probate Resources
      • Chapel Hill Probate
      • Raleigh Probate Resources
    • Professional Resources
Home » Estate Planning Articles » What Does It Mean To Be a Trustee?

What Does It Mean To Be a Trustee?

Compliments of Our Law Firm,
By: The American Academy of Estate Planning Attorneys

If a family member or friend has chosen you to serve as Trustee of their Living Trust, you’ve been given a great honor. It means they believe you are honest and responsible and they have a great deal of faith in your abilities and your personal integrity. It also means that you have an important, and sometimes complicated, job to do.

Basic Duties

While no two Trusts are exactly alike, all Trustees share the same basic obligations. A Trustee is charged with the responsibility of managing the assets that belong to the Trust. In doing this, the Trustee is required to follow the terms of the Trust document.

Current vs. Successor Trustee

Your obligations might begin immediately, or they may not start until some point in the future. This depends on whether the person creating the Trust – called the Trustor – has named you the current Trustee or the successor Trustee.

Let’s imagine your father is the Trustor. It’s common for someone creating a Trust to serve as his own Trustee as long as he is alive and well, and your dad is no exception. He has chosen you as his successor Trustee, so you don’t have any obligations until your father dies, or until he suffers an illness or injury that renders him incapable of managing the Trust on his own.

If your dad became mentally or physically incapable of serving as his own Trustee, you would step in and follow the instructions in the Trust document for having your father removed as Trustee. Normally, this means getting a physician’s statement that your father is no longer able to manage his own affairs. You would then follow the terms of the Trust to manage Trust assets for your dad’s benefit. If your father later regained the ability to serve as his own Trustee, he would have the option to once again take over that role.

If your father died, you would need his death certificate to take over the role of Trustee.

Administration

As Trustee, you have the responsibility to follow the terms of the Trust document and manage the Trust assets in a prudent manner. This not only means preserving the property your father transferred into the Trust, it also means investing the Trust assets responsibly. Each state has its own standards that define what it means to invest Trust assets prudently.

In addition to following the terms of the Trust, you as Trustee have a fiduciary duty to the beneficiaries of the Trust. This means you must manage the Trust in the best interests of all the beneficiaries, rather than using the assets in a way that solely benefits you.

You’ll also need to keep up with administrative duties, such as keeping an inventory of Trust assets, keeping accurate records of transactions you make on behalf of the Trust, and filing income tax returns and, possibly, estate tax returns for the Trust.

Distributions

Not only are you responsible for the management of the Trust, you are also responsible for distributing the Trust assets in accordance with the terms of the Trust. Trusts vary widely when it comes to the discretion Trustees are given in making distributions. For instance, your father’s Trust document might name you and your two siblings as the sole beneficiaries of the Trust, and instruct that the Trust assets be sold and the money divided evenly among the three of you.

On the other hand, the document might give you the discretion to distribute Trust funds to provide for the “health, education, maintenance, and support” of your siblings. This would leave you to decide how much of a distribution – and how often – is reasonable given your siblings’ circumstances.

Just as no two Trusts are alike, no two Trustees have exactly the same responsibilities and challenges. An experienced estate planning attorney can help you understand your duties so that you can fulfill your role with confidence.

Date: April 30, 2012

Clarity Legal Group

Free Estate planning Worksheet

There's a lot that goes into setting up a comprehensive estate plan, but with our FREE worksheet, you'll be one step closer to getting yourself and your family on the path to a secure and happy future.

  • This field is for validation purposes and should be left unchanged.

Follow Us

Address

Clarity Legal Group
1414 Raleigh Road Suite 445
Chapel Hill, NC 27517
United States (US)
Phone: 919-484-0012

reply@claritylegalgroup.com

Mailing Address
PO Box 2207
Chapel Hill, NC 27515

Exchange West Office Map

Office Hours

Monday9:00 AM - 5:30 PM
Tuesday9:00 AM - 5:30 PM
Wednesday9:00 AM - 5:30 PM
Thursday9:00 AM - 5:30 PM
Friday9:00 AM - 2:00 PM

Map

clarity_sidbr_map

Clarity Legal Group is conveniently located in the heart of the Triangle, based in Chapel Hill and proudly serving the state of North Carolina including Durham, Cary, Apex, Pittsboro, Hillsborough, Holly Springs, and Raleigh.

  • About The American Academy
  • Disclaimer
  • Diversity
  • Sitemap
  • Privacy Policy
  • © 2023 American Academy of Estate Planning Attorneys.
    All Rights Reserved.
    Attorney Advertisement
  • Clarity Legal Group footer logo

    Clarity Legal Group is a registered Trademark and trade name for The Mark Costley Law Group, PLLC


    • Read Our 5-Star Client Reviews

"AV® , AV Preeminent® , Martindale-Hubbell DistinguishedSM and Martindale-Hubbell NotableSM are Certification Marks used under license in accordance with the Martindale-Hubbell® certification procedures, standards and policies."

x

Fill out the form below to access to the worksheets and checklists discussed in The Ultimate Caregiver Guide! After submitting this form, you can clic

  • This field is for validation purposes and should be left unchanged.