Becoming a Trustee

I’ve become a trustee of family member’s trust, now what?

The job of being a trustee of a trust can be daunting and leave you feeling afraid of the dark, even if you never were before. There are several things you should do that will help you feel more in control.

Get a Copy of the Trust and Read It. One of the first things to do is obtain a copy of the trust, if you haven’t already, and read it. Even if you don’t understand it in its entirety become familiar with the contents, the specific gifts, provisions, powers, and other terms. Make a list of people named in the trust and any assets listed, normally assets are listed on a schedule attached to the end of the trust. Your familiarity with the trust will help you speak with the beneficiaries and any professionals you may need in carrying out your duties. The better informed you are about the contents and purpose of the trust, the more in control you’ll feel and the better decisions you’ll make.

Understand Your Duties. As a trustee of a trust you now take on a fiduciary duty to administer the trust in the best interests of the trust beneficiaries. Hopefully the trust has been well drafted and will provide significant guidance in what the priorities should be for the beneficiaries. If the trust does not provide the appropriate guidance, you should seek legal counsel to assist you in obtaining the necessary guidance from state law and unfortunately in this type of situation, may even require a judge to make the right decision.

You may want to obtain the services of an attorney, accountant, financial advisor, and a real estate professional to assist in the many obligations that come with administrating the trust and they’ll be able to provide you with guidance along the way.  While you may be permitted to delegate certain duties according to the terms of the trust or state law to these advisors, the ultimate responsibility of the administration of the trust remains with you. So keep abreast of what they’re doing for you with regular communication and updates. The better informed you are the better able you are to fulfill your fiduciary duty.

Get organized. Gather up the Will, hopefully there is one,  bank statements, investment statements, retirement statements, latest tax return, property tax statements, household bills, credit card statements, etc. Gathering all of this information will allow you to begin the process of gaining control of each of the assets so you can meet any of the final expenses and funeral arrangements of the deceased, the ongoing obligations of the trust, establish other instruments required by the trust and eventually prepare for any future distributions to beneficiaries.

Notify the Beneficiaries and Heirs. Many states require that the beneficiaries of a trust be notified within a set number of days after the grantor dies. There are even some states that have specific statutory language the needs to be used when notifying the beneficiaries and heirs. Sometimes the trust will provide the exact language to use when notifying the beneficiaries and heirs. Another very good reason to read the trust first.

While there are many more obligations and requirements to properly administer a trust, starting with these three simple steps will put you on the right path to fulfilling your responsibility. Please seek the advice of other professionals to assist you with this task since there can be numerous landmines to the uninformed.