When a person sets up a trust as part of his or her estate plan, one thing that matters a great deal is who he or she selects as trustee. This is the party that manages the trust and handles distributions to beneficiaries. When it comes to serving this role, there are a wide range of responsibilities that fall on the trustee.
Some of the typical responsibilities are to:
- Manage and protect the assets of the trust
- Follow the terms of the trust
- Accurately document trust transactions
- Make sure tax matters related to the trust are properly handled
- Act in the best interests of the trust's beneficiaries
- Treat all beneficiaries of the trust fairly
Unfortunately, there are things that can lead to trustees failing to meet these responsibilities. Some examples include a trustee: making mistakes when it comes to asset management, acting in his or her own best interests rather than that of the beneficiaries or exhibiting favoritism toward one beneficiary to the detriment of others.
When a trustee fails to do what he or she is supposed to, it can cause considerable harm to the beneficiaries. It can also endanger a trust's ability to achieve its intended purposes. Additionally, it could leave a family having to deal with a lot of complex legal matters.
So, when selecting a trustee when setting up a trust, it can be important for a person to carefully think about who has the skill and trustworthiness needed to manage the trust in the right way.