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Dos and Don’ts for Trustees

At Surprenant & Beneski, P.C., our trust attorneys have extensive experience drafting and executing trusts for clients throughout Southeastern Massachusetts and Cape Cod. Trusts may be testamentary, revocable, or irrevocable. Their purposes are variable — e.g. avoiding probate or excessive taxation, protecting individuals with special needs, and providing for charitable contributions. In all cases, trusts require designated trustees to manage them after the trustor’s death. 

Whether you are establishing a trust as part of your estate plan or have been named a trustee by someone close to you, it is important to understand what the job of a trustee entails. All trusts, whatever purpose they are designed to meet, are legally binding documents in which a third party, the trustee, holds and manages assets for a beneficiary according to the directives of the trustor.

Dos for Trustees

Trustees are fiduciaries and, as such, owe a duty of financial integrity to both the trustor (grantor) and the beneficiary and can be held legally accountable for their actions. Their duties are numerous and include the following dos:

  • Do file an affidavit of the grantor’s death
  • Do notify all of the deceased’s legal heirs
  • Do notify all of the beneficiaries of the estate of their inheritance
  • Do notify concerned financial institutions of the decedent’s death
  • Do open a bank account for the trust
  • Do have the all trust assets professionally assessed
  • Do manage the trust assets according to the trustor’s wishes
  • Do protect the trust assets by investing them carefully on behalf of the beneficiary
  • Do file a final income tax return for the decedent and pay any owed taxes
  • Do transfer or sell assets as necessary to pay all taxes and other bills of the estate
  • Do distribute assets to beneficiaries as directed by the terms of the trust

In order to meet all of the duties of a trustee, it is a good idea to receive the counsel of a knowledgeable and well-respected trust attorney who can guide you through the process and ensure that you fulfill all of your fiduciary responsibilities.

Don’ts for Trustees

It is essential that you take your duties as a trustee seriously since the law can hold you accountable for errors in procedure or judgment. The following caveats must be adhered to:

  • Don’t use trust assets for your own personal benefit unless the words of the trust authorize you to do so.
  • Don’t mix trust assets with your own; keep separate bank accounts and investments
  • Don’t favor one beneficiary over another unless directed to do so by the trust
  • Don’t make risky investments with trust funds — your  goal should be conservative investments that offer reasonable growth with minimal risk
  • Don’t be lax or disorganized about recordkeeping; make sure to keep accurate records of trust expenditures, tax filings, and regular reports to beneficiaries 

In order to make certain that you are taking all necessary steps to administer the trust correctly, it’s a good idea to check in with your trust attorney on a regular basis. 

Why the Dos and Don’ts for Trustees Are Important

In worst-case scenarios, if trustees fail in their fiduciary duties, beneficiaries have the right to take legal action against them. When such situations arise, common beneficiary complaints are that the trustee:

  • Made poor decisions in terms of investment or disbursement of funds
  • Made decisions based on self-interest rather than on behalf of the beneficiaries
  • Mistakenly favored the interests of one beneficiary over another
  • Failed to pay estate debts or taxes promptly
  • Failed to keep adequate or accurate records of trust transactions

If you are faced with such claims, whether or not they have merit, the astute trust attorneys at Surprenant & Beneski are here to help. A better course of action, however, is to be proactive by consulting with us early on. We will answer all of your questions and provide you with critical guidance about how best to proceed.

Contact Our Experienced Trust Attorneys Today

Every trust has unique elements so understanding the general dos and don’ts of trust administration is not the same as performing the necessary tasks pertaining to a particular trust. Contact us now to clarify your new role so you can fulfill your duties effectively — with the most satisfaction and least stress possible.