Trusts are created to provide financial security for a person’s beneficiaries and they come in several forms. A trust can be for individuals or an organization. For instance, some people create trusts for their children, while others are for charities or other non-profit organizations. Any trust needs to be managed properly so that it complies with the law and achieves the purpose for which it was created.
The responsibility of managing a trust is carried out by a trustee and this can be individuals or an organization. As you consider creating a trust, it is wise to get acquainted with the intricacies of appointing a trustee, since it has legal implications. The following article by Investopedia describes what a trustee is:
BREAKING DOWN ‘Trustee’
A trustee is any type of person or organization that holds the legal title of an asset or group of assets for another person, referred to as the beneficiary. A trustee is granted this type of legal title through a trust, which is an agreement between two consenting parties. Trustees usually have a fiduciary duty to the trust they oversee. This means that they are required to put aside personal goals and initiatives to do what’s best for the trust. A trustee is therefore responsible for the proper management of all property and other assets owned by the trust for the benefit of a beneficiary. A trustee’s specific duties are unique to the agreement of the trust and are dictated by the type of assets being held in trust. Read more at Investopedia…
As the article above describes, the trustee holds the legal title of the assets and therefore is endowed with the authority to manage these properties in the best interest of the beneficiaries. You therefore need to choose a person who is trustworthy and responsible as a trustee to execute the fiduciary duty.
The roles and duties of a trustee vary depending on the trust agreement you have. Trust attorneys are very helpful in the process of creating a trust and appointing a trustee since they are knowledgeable in this area. Even so, there are some generally accepted roles and it is best to become familiar with them. The following post describes the roles of trustees in detail:
Trustees Should Be Comfortable With Numbers
“State laws require a trustee to administer a trust in the best interests of the beneficiaries.”
Trustees have a large number of responsibilities, many of which require some general accounting skills. Depending on the amount and type of assets you put into the trust, your trustee may need to correspond with financial institutions, keep track of all income and losses from investments, prepare periodic financial reports for beneficiaries, file tax returns, and distribute money to beneficiaries.
If you don’t know any one personally who could do a good job, you can name a lawyer or a professional organization to serve as trustee. However, professional trustees are usually paid (well) out of trust funds, and many trust makers prefer their trustees to have a more personal relationship with trust beneficiaries. Read more at Lawyers.com…
Understanding the role of the trustee as described above gives you an idea about the skill set the person to be appointed should have. It basically requires that the person knows how to properly manage your money, aside from the more obvious role of decision-making.
As discussed earlier, trusts can be created for various purposes and some of them include a trust fund, a charity fund and pension funds or even retirement plans. When a trust is created for retirement or a pension fund, there are certain roles that need to be differentiated so it works well. The following post explains this further:
What Is the Difference Between a Trustee and Custodian in a Pension Plan?
These two roles are both important for your retirement.
Pension plans have become less common over the years, but they still play a vital role in the retirement prospects for millions of workers across the nation. Although most people think of their employers as playing the most important role in their pension plans by actually contributing the money that goes toward their retirement benefits, there are other things that have to be done correctly in order to ensure the plan assets are adequately managed throughout your lifetime. Specifically, both trustees and custodians have vital tasks they must do to protect pension plan money. Let’s take a look at how these jobs are different and what they each involve. Read more at Fool.com…
As you plan for the future of your estate, it is crucial to understand the roles and responsibilities involved so you can provide for your heirs and favorite charities. A lawyer with a solid knowledge of estate planning can help you navigate through the legalities of any trusts you want to create.
Attorney Jonathan Meek has the experience you need. What’s more, he can ably fill the role of trustee for you. Contact him at Meek Law Firm today to discuss your trust and other estate planning needs. Call (704) 848-6335 or use the contact form on the right of this page to schedule a consultation appointment.