It’s an honor when your friend or family member asks you to serve as their trustee. What that means is that they are entrusting you to properly handle key assets upon their death—suggesting that they view you as someone who is trustworthy and responsible.
With that said, serving as a trustee isn’t something you should agree to lightly. There are real responsibilities, and it’s important to make sure you know what you’re getting into—and, that you’re up for the challenge.
Talking with an estate planning lawyer can be helpful; in addition, we encourage you to review some of the guidelines in this post.
Understanding the Job Description
In creating a trust, your friend or loved one is essentially setting up the legal means by which they can transfer assets to another party—the beneficiary. As the trustee, your job would be to manage these assets and ensure they are transferred in accordance with your loved one’s wishes. When your loved one dies, you become the legal owner of that trust.
The specific duties of the trustee can vary, but some common examples include:
- Identifying and protecting the assets encompassed by the trust;
- Reviewing the trust documentation to ascertain what’s expected of you;
- Communicating with the trust beneficiaries;
- Managing assets long-term;
- Ending the trust when it’s time to do so; and
- Consulting with an estate planning attorney.
Where to Turn for Help
That list may seem a little daunting, but the good news is, trustees don’t have to go it alone. While you have all the legal responsibility of managing the trust, you are free to seek the expertise of an estate planning lawyer. Additionally, accountants can help you properly fill out the trust’s tax return. And in most cases, the expenses associated with these outside experts can be paid for from the trust itself.
Should You Agree to Be a Trustee?
Most people who are asked to serve as trustee agree to do so after all, it’s quite an honor. With that said, there are some situations in which you may want to think twice before agreeing to be a trustee. These include:
- The trust beneficiaries are people you don’t like or don’t get along with. You’ll have to interact with the beneficiaries regularly, and maintain an unbiased approach in all your dealings—so if you think that could be a challenge, you may want to decline the offer.
- You’re unsure about the assets. In situations where you’re not sure what kind of assets/properties the trust owner has, and think it will be challenging to find out, it may be better to say no.
- The trust and/or trust owner are involved in lawsuits. As the trustee, you’ll have a duty to defend the trust against any lawsuits that are brought against it—and if there are already lawsuits piling up, that’s a big red flag!
- You’re asked to serve as co-trustee. When two or more trustees are involved, it almost always ends in one person doing the lion’s share of the work—and that can be truly frustrating. It’s reason enough to at least think twice before you say yes.
Make the Right Decision About Serving as Trustee
If you’re still unsure about whether to serve as trustee, or if you simply want more information about what the role might entail, we invite you to reach out to the estate planning attorneys at Singh Law Firm. Contact us today with any trust-related questions or concerns.