What Are a Trustees’ Real Responsibilities?

It may seem like a default to name your oldest responsible child or your spouse as the trustee of an established trust. However, trust administration may require many different tasks and can be overwhelming or something that neither of those parties want to take on. The primary duties of a trustee include management, investment, collection and distribution of assets inside the trust. If you choose to use a trust as part of the planning for your Virginia estate, it’s wise to make sure you talk it through with an estate lawyer first to make sure you understand the benefits and the importance of selecting a trustee.

The trustee must follow the trust agreement itself, meaning that they need to be familiar with this document and must also be prepared to keep detailed accounting records about what they did with regard to managing the trust. Another key trustee consideration is their ability to communicate effectively with beneficiaries. Many trust disputes relate to lack of communication between a trustee and the trustees’ beneficiary.

Trustees must also be aware of potential tax implications, which is one reason why some people choose to hire a professional trustee rather than giving this responsibility to a family member. Depending on the trust’s type and situation, a tax return may be required for the trust itself as well as a federal estate tax return when a person passes away. Furthermore, a trustee will also need to prepare a form 1040 final income tax return as well. In many cases, a trustee may be eligible to hire outside assistance to help with these aspects of planning.