Understanding The Role Of A Trustee

There are two fundamental reasons why someone would need to know the role of a trustee. 

  1. You may become one
  2. You may have to choose one.

Everyone needs an estate plan. A trust is a powerful tool to use when creating your estate plan. It is meant for people with assets and property—not just the wealthy. By understanding what a trust is and how it can serve your needs, you will see how the trustee fits into it. 

Creating A Trust 

It begins with you wanting your assets to go to others after you pass away. Instead of your assets going directly to these people, they get placed into a trust. In the eyes of the law, a trust is a legal entity that contains your assets. You can put them into it while you’re still alive.

When you create a trust, you are the grantor. If there are ownership titles for the things you put into the trust (also referred to as funding trust), your name gets removed from them. The titles are now in the name of the trust. 

Should anything happen to you, your assets have already been put into a trust. It is not up to the court to distribute these. The trustee handles this. 

What The Trustee Does

The trustee is responsible to the beneficiaries. The grantor (and likely an attorney) solidified the trust and established which assets go where. Trustees manage the trust per the grantor’s wishes. 

Being a trustee can be a significant undertaking. If there are assets to be invested, you will be responsible for this. You will likely be expected to do so reasonably. Seek low-risk investments with steady, albeit relatively slow, growth.

In addition, you may have to give reports to the beneficiaries regarding the state of the trust and the investments. 

Are you expected to handle all this on your own? No, and various professionals can help you. The first is an attorney. You are executing according to the directions and intent expressed by the grantor. An attorney ensures you understand the scope of your work. Secondly, there are ways for the grantor to manage the trust (and be one of two trustees) while he or she is alive. You can also choose to hire accountants and bookkeepers.

Trustees can also be paid for their time and work. Either the trust states how much you will be paid, or an attorney can determine it. 

ElDeiry & ElDeiry, P.A

A trust is a powerful estate planning tool. If you are ready to build an estate plan—or modify one due to new circumstances, contact ElDeiry & ElDeiry, P.A., to schedule a consultation. The right plan gives you peace of mind, and we are ready to help you get there.

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