If there are several trustees, they have dual responsibility for their own acts, omissions and decisions, as well as those of their co-trustees. At common law, if there were several trustees, each trustee was required to participate in the administration of the trust, unless otherwise specified. If a fiduciary breached his fiduciary duty, the other fiduciaries had to force him to remedy it. Under UTC, co-trustees are required to exercise due diligence in the performance of the trustee`s duties, unless they are actually assigned to another co-trustee and act by majority vote. UTC allows a dissenting trustee to absolve himself of liability by documenting this dissent. But a dissenting co-trustee must prevent “any serious breach of trust” and “force a co-trustee to remedy a serious breach of trust.” Honorarium. Trustees are entitled to reasonable fees for their services. Often, family members do not accept fees, although this may depend on the work in a particular case, the relationship of the family member, and the choice of the family trustee based on their professional expertise. It can be difficult to determine what is reasonable. Banks, trust companies and law firms typically charge a percentage of funds under management. Others may charge for their time. In general, the question of what is appropriate depends on the work involved, the amount of trust funds, other expenses paid by the trust, the professional experience of the trustee, and the total cost of administering the trust.
For example, if the trustee has retained an outside firm for investment purposes, this effort suggests that the trustee charges a slightly lower fee. In any case, it makes sense to contact a professional who has experience in fiduciary work and who can advise you on normal fees, taking into account all the circumstances. For a living trust to function properly, the settlor must transfer assets to it. The securities must be replaced by the name of the trust. The settlor should discuss with their estate planning lawyer the type of assets that should be transferred to the trust. Since the grantor`s name no longer appears on the titles, there is no reason for the court to intervene if the grantor becomes incapable or if the grantor dies. It is therefore very easy for you, as a trustee or estate trustee, to intervene and manage the financial affairs of the settlor. A trustee has many roles, but the main purpose is to carry out the instructions of the trust. The ultimate goal of any trust is to protect your inheritance. So when you think about “what does a trustee do?” or “what is the role of a trustee,” it`s easier to remember that there are many aspects to the role. Trustees must do some or all of the following: The trustee`s settlor may specify the extent of the trustee`s powers in the trust deed or will.
The trustee must fully understand his duties and obtain the legal and tax advice necessary for the proper performance of the function. The courts have clarified that not only must the trust indemnify the trustee for obtaining such advice, but the trustee`s failure to seek the advice of an appropriate expert may give rise to claims for breach of fiduciary duty. Estate planning is something everyone, not just the very wealthy, should do. Without a legal and defined plan, you leave all your legacy to the courts. Estate plans come in many shapes and sizes, but if there`s one thing we know, it`s that the process is certainly not unique. All trustees have general policies and responsibilities, regardless of the specificity of the escrow agreement. All assets must be confirmed as safe and under the control of the trustee. This includes understanding the conditions of trust and potentially unique desires of beneficiaries. All investable assets must be considered productive for the future benefit of the beneficiaries. Distributions. If you have the discretion to make or not make distributions to a beneficiary, you must assess the recipient`s current needs, future needs and other sources of income, as well as your responsibilities to other beneficiaries, before making a decision.
And all these considerations must be made in light of the extent of trust. Often, the most important role of a trustee is the ability to say “no” and set limits on the use of the trust. This can be difficult when the need for up-to-date support is immediately obvious. At common law, the trustee had an express duty not to delegate acts that could reasonably be asked to be performed. However, a trustee could employ agents and lawyers if circumstances warrant. The UTC commentary states that “a trustee may delegate tasks and powers that a prudent administrator with comparable capabilities could justly delegate in the circumstances.” In addition, UTC maintains the fiduciary to a reasonable standard of care, skill and prudence when selecting an agent. As a fiduciary, you have certain responsibilities. For example, you must follow the instructions in the trust document: No, of course not. You can get help from professionals, especially for accounting and investing.
You will probably need to consult a lawyer from time to time. However, as trustee, you are ultimately accountable to the beneficiaries for the prudent management of the trust. What is a trustee? What are the trustee`s obligations? Do I need a trustee in my will? We answer these and other questions in our beginner`s guide. This may very well be the most important task to perform in a person`s life – a level of trust is demonstrated that eloquently indicates that someone views the potential trustee as a trustworthy person. Whether it means making the commitment depends on your ability to devote the attention and time needed to complete tasks appropriately. A good first step is to read the proposed trust and discuss responsibilities with experienced professionals. A trustee is therefore responsible for the proper management of all assets and other assets of the trust for the benefit of a beneficiary. The specific obligations of a trustee are specific to the trust agreement and are determined by the type of assets held in trust. For example, if a trust consists of different assets, it is the trustee`s responsibility to supervise those assets. Trustees are also required to financially manage and monitor a trust`s accounts if the trust consists of other investments, such as shares in a brokerage account. Next, search for and verify the approval document. (I hope you already know where it is.) Notify all co-trustees as soon as possible.
Also inform the attorney who created the escrow document. This lawyer can be very helpful if you have any questions. You may want to meet with the lawyer to review trust and your responsibilities. The lawyer can also create a trust certificate, an abbreviated version of the trust that also proves that you have the legal authority to act. A trust is a legal entity that can own assets. The document looks like a will; And like a will, a trust contains instructions on who settles the settlor`s final affairs and who receives the settlor`s assets after death. There are different types of trusts: testamentary (written in a will after a person`s death); irrevocable (normally cannot be changed); and revocable life trusts. A successor trustee is appointed to intervene and administer the trust if the trustee is no longer able to continue (usually due to incapacity for work or death).
As a rule, several are appointed one after the other in case one or more cannot act. Sometimes two or more adult children are appointed to act together. Sometimes a corporate trustee (bank or trust) is appointed. Sometimes it`s a combination of both. Fiduciary Responsibility. As a trustee, you have a “fiduciary” role to the beneficiaries of the trust, both current and “other” beneficiaries designated to receive the assets of the trust after the death of the income or primary beneficiaries. As a trustee, you are held to a very high standard, which means you need to pay even more attention to investments and escrow payments than you would in your own accounts. Beneficiaries can recover improperly distributed trust assets if they can be traced back to the trust. The claims of the beneficiaries against the trustee do not have a higher priority than the claims of other fiduciary creditors. However, it is the beneficiaries, not the creditors, who are the only parties who can reach the trust.
