Few moments in life bring such a mix of honor and anxiety as being named as a Trustee. It’s an important role — a sign that someone trusted you deeply — but it’s also a serious legal and financial responsibility. Trustees are tasked with managing the assets of a trust for the benefit of others, often in accordance with complex estate plans and detailed state and federal laws.
If you’ve just learned that you’re a Trustee, take a deep breath. The job can seem overwhelming, but with the right information and professional help, you can fulfill your duties properly — and protect yourself along the way. Here’s where to start.
- Get the Documents — and Get Oriented
Your first step is to locate the trust documents. These documents spell out your responsibilities and the specific instructions about how assets should be managed or distributed. Make sure you have all of the relevant documents, including all amendments that may have been made to the Trust since it was created.
If you can’t find the trust documents in the decedent’s files, don’t panic. Try to determine who drafted the estate plan — often, the estate planning attorney will have retained the original documents or, at the very least, copies in their files. Attorneys typically keep these documents for many years, so tracking them down can save you considerable confusion later.
Once you have the trust documents in hand, read through them carefully (ideally with professional help) and make note of:
- Who are the beneficiaries? These are the people (or sometimes organizations) who will receive benefits from the trust.
- What are your duties? Some trusts require ongoing management of trust assets; others call for an outright distribution of assets to the beneficiaries.
- Any specific conditions? For example, a trust might direct you to pay out funds only after a beneficiary reaches a certain age, or to provide annual distributions of income only.
It is also important to understand what assets are owned by the trust, and which assets are not owned by the trust. Understanding these basics gives you the foundation you need to move forward responsibly.
- Hire an Attorney — Don’t Go It Alone
Acting as a Trustee is not just an act of goodwill — it’s a legal position with fiduciary duties. That means you are legally obligated to act in the best interests of the beneficiaries and to follow the trust’s terms to the letter. Because even well-intentioned mistakes can have serious consequences, it’s crucial to get legal help early.
A trusts and estates attorney can guide you through the process, help interpret the legal language of the documents, and ensure you stay compliant with all requirements. If you know who prepared the estate plan, consider hiring that same attorney — they already understand the decedent’s intentions and are familiar with the structure of the trust.
A good attorney can also help you avoid common pitfalls, such as prematurely distributing assets, mismanaging investments, or failing to file required tax forms.
- Don’t Forget the Taxes
Another key part of your responsibility is making sure all tax filings are properly handled. These include fiduciary income tax returns, and if you are also named as the Personal Representative of the estate, the decedent’s final personal income tax return and potentially state and/or federal estate tax returns. In Massachusetts, an estate tax return is required if the total value of the estate exceeds $2 million. Missing or incorrectly filing these forms can delay the administration of the estate, require the payment of unnecessary penalties and interest, and even create personal liability for you as Trustee.
It’s wise to consult both your attorney and a qualified accountant who has experience with estate and trust returns. Together, they can help ensure every requirement is met and all deadlines are observed.
- Managing Ongoing Trust Assets
Not all trusts end quickly. Some are designed to last for years, even generations, providing income or support to beneficiaries over time. If you’ll be overseeing assets for an extended period, consider engaging a financial advisor who understands fiduciary investing. A financial professional can help you create an investment policy that aligns with the trust’s goals, balance risk and return appropriately, and keep proper records of investment performance and distributions.
Remember, as Trustee, you’re required to manage the trust’s assets prudently — not just with good intentions, but according to a reasonable standard of care. Delegating to qualified professionals helps you meet that standard.
- Protect Yourself
This point cannot be overstated: a Trustee can be held personally liable if something goes wrong. That means if you mishandle funds, overlook taxes, or distribute assets prematurely, you could be on the hook to make things right out of your own pocket.
To safeguard yourself:
- Keep detailed records of every dollar that moves in or out of the trust.
- Don’t rush to distribute assets until you’re confident that all debts, taxes, and administrative expenses have been paid.
- It’s often wise to hold back a reserve of funds to cover final costs — such as professional fees, income taxes, or other lingering obligations — before making final distributions to beneficiaries.
- Make sure you work with an attorney to prepare comprehensive receipts that the beneficiaries sign in exchange for their distributions, which will not only acknowledge receipt but also release the Trustee from liability and agree to refund assets they have received if an unexpected obligation arises.
Once you’re confident that all obligations are met, get the green light from your attorney so that you can make final distributions to the beneficiaries without worry.
Final Thoughts
Serving as a Trustee can be both challenging and rewarding. You’re stepping into a role that requires diligence, organization, and sound judgment — but also one that honors the trust someone placed in you. By gathering the right documents, assembling a team of professionals, and moving carefully through each step, you can fulfill your duties faithfully and protect yourself in the process.
Being a Trustee isn’t easy, but you don’t have to do it alone — and with the right support, you can carry out your responsibilities with confidence and integrity.
Attorney Leah A. Kofos is an attorney with the Dedham firm of Samuel, Sayward & Baler LLC, which focuses on advising its clients in the areas of trust and estate planning, estate settlement, and elder law matters. This article is not intended to provide legal advice or create or imply an attorney-client relationship. No information contained herein is a substitute for a personal consultation with an attorney. For more information visit ssbllc.com or call 781-461-1020.
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