What Are the Responsibilities of a Trustee to a Beneficiary?
The responsibilities of a trustee to a beneficiary include complying with the instructions in the trust document; keeping the trust assets separate from the trustee’s personal assets and maintaining separate records; and investing the trust assets in fiscally conservative ways, according to WealthCounsel. Unless the trust language permits it, the law forbids a trustee from using trust assets for the trustee’s personal benefit. If there is more than one beneficiary, a trustee must treat all beneficiaries equally, without showing favoritism.
A trustee’s obligations include accurate record keeping, timely tax return filing and periodic reporting to the beneficiaries in accordance with the trust instructions, explains WealthCounsel. A trustee can retain professional assistance, such as an attorney, certified public accountant and investment adviser. The ultimate responsibility for the trust assets remains with the trustee. The trust document typically gives guidance for compensating a trustee.
Trust documents often provide for co-trustees, such as married couples. Naming co-trustees enables a smooth transition without court intervention in the event that one trustee passes away, or is no longer able to serve, notes WealthCounsel. The trust grantor can also name successor trustees in the trust document. A successor trustee assumes responsibility for the trust if the original trustee is unable or unwilling to continue serving.