Duties and Responsibilities of a Trustee

Quick Review: A Trust consists of at least three parties: Trustor, Trustee, and Beneficiary.

• Trustor (Grantor/Settlor) – creates the Trust and contributes property to it.
• Trustee – administers the Trust and holds legal title to Trust property, not for his or her own benefit, but for the benefit of the Beneficiary.
• Beneficiary – enjoys the benefits of Trust property without the risks and liabilities of traditional ownership.

Being named as Trustee (or “successor Trustee”) is an honor, but it comes with significant responsibility. Often the role begins after the death of the Trustor, but a Trustee may step in during incapacity or when invited to assist with financial management. Understanding the role in advance helps you choose the right Trustee while reducing confusion and stress for loved ones.

What Does a Trustee Do?

A Trustee manages assets for the benefit of others according to the instructions in the Trust. While the role may sound complex, the core duties are straightforward: act prudently, follow the Trust’s instructions, keep accurate records, and always act in the best interests of the beneficiaries.

Trustees safeguard and manage property by paying expenses, overseeing investments, and making distributions when appropriate.

Responsibilities During Incapacity

By stepping in upon incapacity, a Trustee allows financial matters to be handled privately and efficiently, without court involvement in the form of Guardianship or Conservatorship proceedings.

During incapacity, a Trustee may pay expenses, help maintain financial stability, and provide for dependents.  The sale of assets, or at least a change in investment strategy, may be necessary to cover increasing costs of care.

Responsibilities After Death

After death, the Trustee’s role shifts to administering and settling the Trust. One of the first steps is marshalling assets, meaning the Trustee identifies, secures, and organizes everything owned by the Trust. This may include real estate, financial accounts, business interests, and personal property.

The Trustee then ensures necessary expenses are paid, such as medical bills, taxes, funeral or burial expenses, and costs of administration. Only after these steps are completed can the Trustee distribute Trust assets according to the Trust’s instructions.

Many Trusts give Trustees discretion when making distributions. This flexibility can help protect beneficiaries from creditors, lawsuits, divorce proceedings, or other financial risks. Thoughtful Trust design can help safeguard inheritances for beneficiaries who are disabled, vulnerable to manipulation, or struggling with addiction.

Trustees typically communicate with beneficiaries during this process and provide periodic accountings.

Do Trustees Have to Do Everything Themselves?

No. Trustees are managers, not laborers. Trustees commonly hire professionals such as attorneys, accountants, and financial advisors to assist with legal compliance, tax matters, and investment decisions. Trustees are also generally entitled to reasonable compensation for their time and effort.

Planning Ahead Makes All the Difference

With preparation and proper guidance, a Trustee can confidently carry out these responsibilities; preserving assets, protecting beneficiaries, and honoring the wishes of the person who created the Trust, ensuring that they Leave a Legacy, not a Burden.