Establishing an estate plan is essential for residents in New York and elsewhere. Depending on the documents included in the plan, one may have to make decisions beyond who gets one at the time of his or her death. When a trust is established, one needs to appoint a trustee to ensure that the assets and property contained in the trust are properly administered. Thus, it is essential to fully understand what this role entails when entrusting an individual to administer a trust during or after your lifetime.

What is a trustee?

In simple terms, a trustee is the individual that is appointed by the grantor to administer his or her assets or property for the benefit of a third party. With regards to a trustee used in the estate planning process, a trustee could be appointed to administer a wide range of trusts, including a revocable trust, irrevocable trust and a charitable trust.

A trust itself is a legal document with the purpose of designating how a grantor leaves his or her estate to their heirs. There are many reasons to establish a trust. Some view it as a means to protect the interests of their beneficiaries. Others use them as a way to avoid the costs associated with probate or the need to work with the court to transfer assets and property.

When creating a trust, the grantor needs to appoint a trustee. It is the trustee that will administer the trust in the manor the grantor outline in the trust. While it can be a honorable role to be bestowed, it is a role that comes with significant responsibilities.

Roles and responsibilities

The three main roles and responsibilities are fiduciary duties, asset and property management and record keeping. With regards to fiduciary duty, a trustee is obligated to protect and pressure the contents of the trust, defend all beneficiaries and the trust against any challenges, keep the trust’s assets separate from their own, handle all assets with car and attention to detail and use caution when acquiring, selling, managing or investing the trust’s property.

When managing the assets and property contained in a trust, a trustee has the duty to distribute assets and property in the ways outlines by the trust, address any tax requirements and properly delegate obligations where allowed, such as hiring a financial advisor. Finally, a trustee must keep impeccable records with regards to anything that has occurred with the trust as it relates to their duties and responsibilities.

The administration of a trust is not a perfect process. Issues could arise, resulting in potential disputes. Additionally, if the roles and responsibilities of a trustee are not fulfilled, this could generate potential legal issues. Therefore, it is important that all parties impacted by a trust understand their rights and what steps they could take if an issues during a trust administration occur.