Understanding the responsibilities of a trustee

| Mar 3, 2017 | Trusts |

If a loved one has previously established a living trust and has passed away, its instructions will typically indicate who should be responsible for the execution of the trust and other essential functions. One of the most important roles to be identified is that of trustee. This person is tasked with managing the assets that are included in the trust. There are several other important responsibilities that a trustee should be ready to fulfill, too, including the following.

Collect and handle benefits upon death

Statistics indicate that less than half of Americans establish a will or trust prior to their death. In cases where a trust has been established, if the grantor passes away, it is the duty of the trustees to gather any benefits that may be dispersed by social security, the grantor’s insurance policy or retirement plans. These funds should expressly be deposited into a separate account that can collect interest until distribution of assets is approved.

Act for grantor in the event of incapacitation

The grantor is the individual who owns the trust and the assets named therein. He or she is the only person who is authorized to alter the trust, unless he or she becomes incapacitated. This is typically the point at which a trustee will assume administration of the trust and its assets, but it can be tricky to identify incapacitation. In most trusts, there are guidelines included that specify the terms for identifying incapacitation in the grantor.

Assume executive and administrative responsibilities

Once assets are in the control of the trust, trustees can manage the finances of the grantor. The practical responsibilities of a trustee will encompass more than just financial management, though. You can expect to handle details involving the grantor’s insurance policies and medical care, too. The most important aspect of the position is ensuring that all necessary actions are completed correctly and efficiently so that the trust remains intact.

Catalog the assets of the trust and their value

Since the ultimate responsibility of all positions in the trust is to protect the assets and to enact the requests of the grantor, it is essential that trustees be familiar with the assets that are contained in the trust. It is likely that the grantor has already created an inventory, but trustees should verify this by creating a catalog of the grantor’s property as well as estimated values of the items.

Enlisting help from a lawyer can simplify handling a trust. An attorney can provide legal advice and representation each step of the way.