What to Expect When You Are The Trustee of an Estate?
Being appointed as trustee is both an honor and a responsibility that carries significant legal and ethical obligations. Whether you have been named as trustee of a family trust, a charitable trust, or another trust arrangement, understanding your role is essential for a smooth estate administration.
It’s a Part-Time Job!
- The role of trustee will end up being a part-time “job” that can last over 12 months:
- You will spend a considerable amount of time executing your duties as the trustee (making phone calls, tracking down statements, reviewing documents etc.).
- As the trustee, you can become personally liable to creditors and taxing authorities if amounts due are left unpaid.
- You should consider taking a trustee’s fee – generally defined as a reasonable fee considering the amount of work to be done and the value of the estate.
You’ll Need to Stay Organized.
- The trustee is responsible for keeping track of the value of all assets and liabilities:
- You will be asked to provide statements for any money that comes in or out of the trust. This process involves locating relevant accounts, and gaining access by providing documentation to prove you are the legal trustee.
- It’s a good idea to create an Excel spreadsheet of the assets and liabilities to keep track of their value and any notes on the accounts.
You Will Sell Assets and Settle Accounts.
- As the trustee, you will be responsible for liquidating the trust assets and making distributions to beneficiaries:
- You will exercise good judgment in the sale of assets and distribution of funds, balancing the needs of the beneficiaries while keeping enough funds to pay outstanding bills.
- You will need to cancel any ongoing expenses that are no longer necessary.
- You must retain enough funds to pay any final estate expenses, including any income taxes that may become due.
You Will Have Fiduciary Duties to Fulfill.
- As trustee, you will be lawfully obligated to fulfill multiple fiduciary duties:
- You must deal impartially with all beneficiaries. You must not favor yourself or engage in self-dealing.
- You must act as a prudent investor. Your trust portfolio should be conservative and diversified.
- You must keep all beneficiaries informed regarding decisions made on behalf of the trust.
- You must keep trust assets separated from your personal assets.
Enlisting the Help of a Board-Certified Estate Planning Attorney is Money Well Spent.
- An experienced estate planning attorney can help you execute your role as trustee:
- They can help you interpret the terms of the trust documents, clarifying any ambiguities and ensuring your actions comply with tax law.
- They can assist you in navigating administrative tasks, including tax returns and trust accountings, ensuring legal requirements are met in a timely manner.
- They can provide counsel on potential conflicts of interest, ensuring you uphold your fiduciary duties.
- They can help you dissolve disputes that may arise between beneficiaries or other parties involved in the trust.
Our legal team at Hoyt & Bryan are experts in estate planning. All of our attorneys are Board Certified Specialists recognized by the Florida Bar. In addition, we are the only Florida law firm with two attorneys who are dual board certified in Wills, Trusts and Estates and in Elder Law. We invite you to attend one of our upcoming complimentary estate planning workshops or call 407-977-8080 to schedule a Discovery and Decision Dialogue today!
