The Role of the Trustee

The trustee acts as the legal owner of trust assets and is responsible for handling any of the assets held in trust, filing taxes for the trust and distributing the assets according to the terms of the trust.

Who Can Be a Trustee?

  • A trustee can be an individual, corporation or association.
  • Trustees can serve in the capacity of sole trustee, co-trustee or successor trustee.
  • When naming a trustee, it’s important to consider the complexities of the trust and whether the trustee you select has the time, knowledge, expertise, objectivity and desire to assume the important responsibilities that accompany this role.

Many individuals choose to name a corporate trustee with the ability to serve as a regulated, impartial third party with the professional experience and broad resources to manage even the most complex situations.

If you’ve been named to serve as a trustee, these guidelines provide an overview of some of the duties you would generally be expected to perform. The trustee’s role is to administer and distribute the assets in the trust according to the grantor’s wishes, as expressed in the trust document.

Trustees have many responsibilities, which include at least:

  • Confirming key elements upon assuming the role of trustee. Ensure the assets are safe and under your control, that you understand the terms of the trust and who the beneficiaries are, and that all past account records are in order.
  • Investing the trust assets (if applicable). Trustees have the fiduciary duty, legal authority and responsibility to manage assets held in trust in such a way as to make sure the assets are preserved and productive for current and future beneficiaries. The trustee has the legal responsibility to reassess the objectives of the trust and current market conditions to be sure that the investments match those objectives. Many trustees will often hire professional managers to handle day-to-day specialized activities such as investment management.
  • Administering the trust according to its terms, including distributing trust assets to the beneficiaries according to the trust agreement and handling day-to-day financial matters on the grantor’s behalf.
  • Making any decisions that arise according to the provisions of the trust. This may include discretion over when beneficiaries may or may not receive payments.
  • Preparing any records, statements and tax returns as needed; also making any tax decisions relevant to the trust and keeping all records on file. The trustee also oversees the preparation of appropriate tax returns and all trust accounting in compliance with complex state and federal taxes.
  • Communicating regularly with beneficiaries, including issuing statements of accounts and tax reports.
  • Finding answers to any questions the grantor and beneficiaries may have concerning the trust.

For more, read our related article, “The Who, What, When, Where, Why, and How of Trusteeship.

Learn more about how we work with trustees: parsecfinancial.com/financial-advice-for-trustees

Sherry Wells, CTFATM
Senior Client Service Specialist

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