If you’ve been named as a Trustee of a loved one’s trust, you should work with an estate planning attorney who will guide you through your duties. In general, you are responsible for preserving and protecting the assets for the benefit of the named beneficiaries. It is imperative to remember that although you are responsible for the assets, the assets are not yours. They belong to the Trust. This is what you should do:
1. Safeguard all Trust assets. Keep assets separate from you own. Never mix (the word attorneys use is “comingle”) your assets with the Trust assets. Keep the investments and the bank accounts in the name of the Trust.
2. You cannot use Trust assets for yourself, unless specifically authorized in the Trust document.
3. Follow the directions in the Trust. The Trust document itself will tell you what to do and when to do it.
4. Make distributions to Trust beneficiaries, carefully following the instructions in the Trust. Unless the Trust directs otherwise, you must treat all the beneficiaries the same.
5. Review investments with a reputable financial advisor. Invest prudently for reasonable growth and protection of principal or as directed in the trust.
6. Provide pertinent Trust financial information to the beneficiaries as the Trust directs. If the Trust document does not provide direction, provide financial information once per year.
7. Keep detailed financial records of expenses, income, and distributions. Keep all receipts and statements.
8. File all required tax returns. If the creator of the Trust is alive and well, the tax information goes on his 1040. If the creator of the Trust is disabled or deceased, the Trust will have its own tax identification number and must file a separate tax return (1041). The federal estate tax form (706) may also be required.
Being a Trustee is an important responsibility. Please feel free to call our office if you have any questions about your role as a Trustee. 858-792-5988. We look forward to hearing from you.