Some people in New York may benefit from establishing trusts to accomplish several different purposes. When a person decides to create a trust, he or she will need to choose someone to serve as a trustee. Before you choose a trustee or successor trustee, you need to understand the duties that he or she will be responsible for performing to ensure that you select someone whom you trust to do so.
Duties of a trustee
Trustees are fiduciaries and are required to abide by the provisions of the trust. They also must act in such a way to protect the funds within the trust and invest them to preserve the funds for the future benefit of the trust’s beneficiaries. Trustees must perform trust administration duties and make decisions about making distributions to the beneficiaries. They must also keep careful financial records and file trust tax returns. Finally, trustees should be available to answer questions from the beneficiaries and maintain an open line of communication with them.
When people establish revocable living trusts, they normally will serve as the trustees. However, if they become incapacitated, they should have named successor trustees to step into the role. Choosing someone who is both trustworthy and capable of performing the duties required of trustees is critical.
Trustees owe a fiduciary duty to the beneficiaries to always act in the trust and beneficiaries’ best interests. They cannot act to benefit themselves with the trust. If they violate their fiduciary duty, they can be personally liable to the beneficiaries and the trust. Choosing someone who is organized and capable of keeping detailed financial records and understands how and when to invest trust proceeds is important for protecting and preserving the assets in the trust to benefit the beneficiaries.