Whether you want to create a trust as part of your estate plan or have taken on the role of trustee for someone else, it is important to understand the responsibilities of a trustee. As the name implies, behaving in a trustworthy manner is vital to the task since being a trustee puts you in the delicate position of managing another person’s assets.
If you live on Staten Island, in one of the other four boroughs of New York City, or in neighboring counties of New Jersey, the skilled trust attorneys of Merlino & Gonzalez are well-prepared to help you create one or more trusts to serve various specific purposes (e.g. protecting your special needs child, leaving assets to charity). We also have decades of experience helping trustees faithfully carry out their duties.
While trusts can be invaluable estate planning tools, managing them can be complicated. For this reason, we advise our estate planning clients to choose a person of intelligence and integrity to be their trustee. Contact us soon to discuss choosing an appropriate trustee and/or how to fulfill your responsibilities as a trustee.
Trustees Have Fiduciary Responsibilities
This means that a trustee is legally obligated to assume a position of trust in regard to the beneficiaries. This requires the trustee to always:
- Act in the best interests of the beneficiaries
- Preserve the value of the trust assets
- Follow the stated directions of the trustor (aka settlor or grantor)
Trustees, as fiduciaries, are not only morally responsible for working in the best interests of the beneficiaries but will be held liable if they fail to do so. Trustee misconduct may result in fines and other civil penalties.
Duties and Responsibilities of a Trustee
The complexity of the duties of a trustee varies depending on the size and nature of the trust, and on the particular circumstances of the beneficiary. Generally speaking, the following tasks are the trustee’s responsibility:
- Following the trustor’s stated directions
- Notifying beneficiaries and interested parties about the settlor’s death
- Inventorying the trust assets
- Arranging for an appraisal of those assets
- Distributing the assets to the beneficiaries as required
- Taking over and managing trust assets, including investing them prudently
- Transferring property into the trust as needed
- Obtaining tax ID numbers
- Filing estate tax returns and making appropriate tax payments
- Keeping complete records of all trust transactions, including tax records
- Continuing to invest trust assets prudently
- Communicating with trustees on an ongoing basis, offering information and answering questions
Apart from complications relative to the assets themselves, the most difficult part of being a trustee may be dealing with excessive demands of beneficiaries or disputes among them. In both of these areas, our trust attorneys can provide you with invaluable advice.
Trustee Responsibilities Include Disclosure of Trust Transactions
Because of your responsibility as a trustee to provide annual accountings to beneficiaries, it is critical to keep clear and accurate records. Our trust attorneys will assist you in setting up your recordkeeping and review your records to make certain they include all necessary data, including:
- Assets and liabilities of the trust
- Distributions to beneficiaries
- Trustee compensation: in NY, trustees receive commissions based on the amount of property paid out annually
- Fees to agents who have provided service (e.g. appraisers, accountants, attorneys)
Because trustees are not typically professionals in related fields, most find it wise to work with a lawyer who has in-depth knowledge of the trust code. Our trust attorneys will work hard to ensure that your records are complete and transparent enough to prevent potential disputes and estate litigation.
How a Seasoned Trust Attorney Will Help You Fulfill Your Trustee Responsibilities
During our long history of dealing with clients we have assisted in taking on the role of trustee, we have at times helped clients extricate themselves from tricky situations that resulted from not working with a knowledgeable lawyer from the get-go. In order to avoid risky and sometimes costly mistakes, it is best to have informed legal representation from the start. The services we provide to trustees include:
- Working with you on a collaborative basis
- Advising you on what actions are acceptable in your role as trustee
- Providing you with access to our network of professionals, e.g. accountants, appraisers, and financial experts
- Helping you to prevent errors that might result in expensive penalties
- Mitigating potential liabilities if any arise
- Negotiating any disputes among beneficiaries
Overall, having the support of our well-respected legal team behind you will provide you with confidence and peace of mind in your role as trustee.
Contact Our Experienced Trust Administration Attorneys Today
At Merlino & Gonzalez, we have a long history of preparing revocable and irrevocable trusts for our clients and helping trustees handle the intricacies of trust administration. We are well-equipped to give you the guidance you need to manage your trust responsibilities as the trustor intended. More than that, we will help you fulfill your trust responsibilities without making mistakes. Contact us now to feel the security that comes with performing the task you were assigned purposefully and properly.
Merlino & Gonzalez helps clients create and administer trusts throughout Staten Island, the other four boroughs of New York City, & nearby counties of New Jersey.