The Role of the Trustee
Trust accounts are important estate planning tools, enabling you to effectively manage your property now and providing a steady transition of your affairs after you pass. While you may be generally familiar with the term “trustee”, it is helpful to fully understand the role of the trustee when developing an estate plan to suit your needs.
What is a trustee?
A trustee is a person or business that has been appointed to manage the assets that are held in your trust, and to execute the terms of that trust. In following the specifications outlined in the trust document, the trustee may invest trust assets and distribute trust income to beneficiaries. The trustee must act in the best interest of the beneficiary and will be held legally accountable for any actions that prove otherwise. Trustees that misappropriate trust assets can be removed or sued by the beneficiaries of the trust.
Duties of the trustee
While the specific duties of the trustee vary depending upon the trust, a trustee may be required to do any of the following:
- Organize paperwork
- Verify that tax forms are filed correctly
- Monitor the trust’s investments
- Manage the assets of the trust
- Direct investments of a trust
- Ensure legal compliance
- Distribute money to beneficiaries
When trust accounts are complex, you may appoint several trustees to manage the trust and designate specific responsibilities for each trustee.
Appointing a trustee
You may designate a competent adult, financial institution, law firm, or other business as your trustee. When selecting an individual to assume this role, it is important to make sure they understand both the nature of the trust as well as their duties prior to acceptance this role. While you may serve as trustee of your trust now, be sure to appoint an alternate trustee to serve should you become incapacitated or for after your death.
In creating a trust account, legal ownership of the property or assets is transferred to a trustee, who assumes responsibility for managing the property. The property is then held for a designated third party, otherwise known as the beneficiary.
We specialize in estate planning
The experienced Maryland estate planning attorneys at Altman & Associates are specialists in estate planning. In fact, it is all we do. For more than 40 years, our estate planning professionals have helped individuals and families reach their long-term financial goals by designing estate plans that are specifically tailored to their needs. We develop last will and testaments, powers of attorney, living wills, healthcare surrogate designations and other estate planning tools. If you are contemplating estate planning, or considering updating an existing plan, then arrange for a confidential consultation with one of our estate planning specialists to discuss your needs. We have convenient office locations in both Rockville and Columbia and can be reached at 301-468-3220 or online.