When someone passes away in Florida, their estate often has to go through a legal…
A trustee is responsible for managing assets held in a trust and protecting the interests of the trust beneficiaries. If someone asks you to serve as a trustee, they are placing significant trust in your ability to manage property, make decisions, and follow the instructions outlined in the trust document.
For example, your friend Rose may establish a trust and ask you to become her trustee. While you may want to help, you may also feel unsure about accepting such an important responsibility.
Before accepting the role, it is important to understand what a trustee does, what duties you may have, and what support is available to help you manage those responsibilities.
What Are the Responsibilities of a Trustee?
A trustee manages trust property on behalf of the person who created the trust and the beneficiaries named in the trust documents.
Depending on the terms of the trust, a trustee may be responsible for:
- Managing trust assets and property
- Paying bills and taxes
- Overseeing bank accounts
- Making investment decisions
- Collecting rent or unpaid debts
- Arranging insurance coverage when needed
- Following the instructions contained in the trust document
- Keeping accurate records of trust activities
A trustee must always act in the best interests of the beneficiaries. This means making careful decisions, avoiding conflicts of interest, and managing the trust with honesty and good faith.
What Does Fiduciary Duty Mean for a Trustee?
In legal terms, trustees are called “fiduciaries.” The word “fiduciary” comes from the Latin word meaning “trust.”
A fiduciary has a legal duty to put the interests of the beneficiaries first. As a trustee, you must meet high ethical standards and act responsibly when handling someone else’s property.
Your role requires careful decision-making because your actions can directly affect the trust assets and the people who benefit from them.
What Should You Consider Before Becoming a Trustee?
Being asked to serve as a trustee is an honour. The person who selected you believes you are responsible, trustworthy, and capable of managing important decisions.
However, you should understand the responsibilities before accepting the role. Serving as a trustee requires time, organisation, and the ability to handle financial and legal matters.
Before agreeing to become a trustee, consider:
- Whether you understand the trust’s instructions
- Whether you have enough time to manage the responsibilities
- Whether you feel comfortable making financial decisions
- Whether you may need professional assistance
How Can Trustees Get Help Managing a Trust?
Trustees do not have to manage every responsibility alone. The Consumer Financial Protection Bureau (CFPB) provides resources to help trustees understand their duties.
The CFPB guide, “Managing Someone Else’s Money: Help for Trustees Under a Revocable Trust,” explains trustee responsibilities, provides helpful resources, and offers guidance about protecting vulnerable individuals from financial exploitation.
You can access the free trustee guide here:
Managing Someone Else’s Money: Help for Trustees Under a Revocable Trust
Why Should Trustees Keep Detailed Records?
One of the most important trustee responsibilities is keeping accurate records. Documenting your decisions and actions helps show how you managed the trust.
Trustees should keep records of important activities, including payments, investments, distributions, and communications relating to the trust.
Good recordkeeping can help prevent misunderstandings and provide clarity for beneficiaries.
Can a Trustee Get Legal or Financial Advice?
Yes. Trustees can seek professional guidance when managing their responsibilities. Estate planning attorneys, accountants, CPAs, and other professionals can help trustees understand complex financial and legal obligations.
Trustees may also consider “errors and omissions” insurance. This coverage can provide protection if an accidental mistake occurs while carrying out trustee duties.
Frequently Asked Questions About Trustee Responsibilities
What is the main job of a trustee?
A trustee manages trust assets according to the instructions in the trust document and acts in the best interests of the beneficiaries.
Is being a trustee a big responsibility?
Yes. Trustees often manage financial, legal, and administrative tasks. Before accepting the role, you should understand the duties involved and make sure you can meet those obligations.
Can a trustee hire professionals for help?
Yes. Trustees can often work with lawyers, accountants, and other professionals to help manage trust responsibilities correctly.
Need Help Understanding Trustee Duties?
Serving as a trustee can feel overwhelming, especially when managing complex financial or legal responsibilities. Understanding your role before accepting the position can help you make informed decisions.
If you would like to discuss ways we can help, please contact our office at (352) 565-7737.
