Duties and Responsibilities of a Trustee in Estate Planning

October 18, 2023

In estate planning, a trustee is an individual or entity appointed to hold and manage the affairs of a trust on behalf of the beneficiaries. If you have been designated as a trustee in someone's trust, it's important that you understand your responsibilities. 

Parties Involved In A Living Trust

Several parties are generally involved in a living trust. They include:

  • Grantor: (sometimes called the creator, trustmaker, or settler) owns the trust's assets. They create the living trust and have the legal authority to adjust it during their lifetime.
  • Successor trustee: the person who steps in and oversees the trust in case the original trustee is unwilling or unable(due to death or incapacity) to fulfill their duties.
  • Trustee: holds and manages the assets outlined in the living trust.
  • Beneficiaries: are individuals or entities who are designated to receive the assets held in the trust in accordance with its terms.

Understanding A Trust

A trust is a legal arrangement of managing assets where one party (grantor) transfers assets such as money, land, or investments to another party (trustee). The primary responsibility is to manage and oversee these assets for the benefit of beneficiaries. There are several types of trusts, including:

  • Revocable living trusts specify how the assets should be managed and administered after their death.
  • Irrevocable trusts that cannot be altered once they have been created. 
  • Special needs trusts.
  • A testamentary trust is created in a will once someone dies.

How Does A Living Trust Work?

Once a living trust is created, the grantor must place assets into it. To create a legal entity, the grantor must transfer the ownership of assets from their name to that of the trust. The grantor should consider seeking legal guidance from an estate planning attorney to help understand the type of assets they should transfer to the trust.

Having a living trust in place is important as it can help avoid probate, maintain privacy, provide for minors, and offer efficient management of assets if the grantor cannot handle their own affairs.

What Are The Duties And Responsibilities of A Trustee?

As a trustee, your primary role is to protect and manage the grantor's assets and ensure they are effectively transferred to the intended beneficiaries. You also have a fiduciary duty to act in the best interest of the beneficiaries and avoid conflicts of interest. As a trustee, you should act according to the terms of the trust, which can include doing the following: 

  • Keeping accurate records
  • Investing trust assets responsibly 
  • Keeping track of checking accounts and investments 
  • Refraining from using the trust for personal gain

Contact Applegate & Dillman Elder Law Today for Help

Our estate planning team is here to help you protect the assets you have worked hard for. We can help create a trust to protect your assets and ensure they get to the rightful beneficiaries.

Contact us at (317) 492-9569 to schedule a consultation and discuss your needs with our experienced Indiana estate planning attorneys.

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