The trustee's role is to manage and distribute the assets in the trust according to your wishes, as expressed in the trust document. There are three primary elements to the trustee's role:
ADMINISTRATION
The administrative role is central to carrying out your wishes regarding the use of assets in the trust. The trustee carries out your directions and follows your guidelines in handling the specific circumstances of each request for funds from trust beneficiaries. This involves legal interpretation of the language in the document, and appropriate input from family members. Experienced and unbiased trust administration is a vital component to implementing your plan.
ASSET MANAGEMENT
The trustee is ultimately responsible for the preservation and appropriate deployment of assets in the trust, ensuring that invested assets are productive and managed appropriately given the trust's objectives. The trustee has the legal responsibility to reassess the objectives of the trust and current market conditions at least annually and to be sure that the investments match those objectives. Trustees will hire professional money managers or allow the clients financial advisor to handle the day-to-day investment activities such as securities or real estate management.
CUSTODY
The custodial role is that of a financial secretary and security guard. The trustee must identify and then take title to the trust's assets, keep accurate records, report to the current beneficiaries and execute and settle all transactions. The trustee oversees the preparation of appropriate tax returns and all of the trust accounting in compliance with complex state and federal laws.
Trustees may have to make tough decisions that might not be popular with all your beneficiaries; after all, the trustee is carrying out your instructions, not your beneficiaries' wishes. This can be a difficult role to fulfill for a family member, who may not be unbiased, or may wish to act in a manner that avoids hard feelings within the family, rather than carrying out your instructions. Also, few family members have investment management skills or expertise in fiduciary law and practice. Family members can be given important advisory roles, in approving disbursements for example, or other exercises of discretion.
The Benefits of Naming a Professional Trustee Include…
- Unbiased loyalty and independence to carry out your wishes
- Knowledgeable management, protection, and defense of trust assets
- Experienced oversight of the investment process to be carried out by the financial advisor or money manager
- Timely and accurate statements of the account to keep you and all current beneficiaries informed
- Fiduciary annual reviews
- Accountable collection and prudent distribution of income and assets
- Tax reporting, filing and comprehensive regulatory compliance on behalf of the trust
|
