A trustee is an individual charged with the task of distributing property in a trust. The creator of a trust usually appoints the trustee. If a trust does not mention a trustee, then a court will appoint one. Property and assets in a trust are assigned to beneficiaries. Trustees have the responsibility of giving out property to beneficiaries and must distribute according to the trust.
What Are the Typical Duties of a Trustee?
In estate planning, trustees have responsibilities known as fiduciary duties. Fiduciary duties include the following responsibilities:
- Duty of Care
- Duty of Loyalty
- Duty to Secure and Safeguard
- Duty to Segregate
- Duty to Invest
- Duty to Account
What Are Some Common Conflicts between a Trustee and Beneficiary?
Problems can arise between a trustee and beneficiaries when there is a lack of communication or legal understanding. Beneficiaries can have strong opinions about who should get what and how it should be distributed.
Although the actions of a trustee may seem unfair to beneficiaries, a trustee may only be sued if there is a breach of any fiduciary duty.
How Can a Trustee Avoid Conflict?
To avoid lawsuits or breaching a fiduciary duty, a trustee can take practical steps when engaging with beneficiaries. The most important is communication:
- Keep beneficiaries well-informed about trust assets being managed
- Disclose trust transactions that affect beneficiaries
- Educate beneficiaries about trust assets, management strategies, and your role as the trustee
- Address questions early and often
- Never hide assets, documents, or other critical information from beneficiaries.
Do I Need a Lawyer for Assistance with Trustee Laws?
Yes. Any type of legal issues involving a trustee should be handled through the expertise of an estate lawyer. If you need assistance with filing a lawsuit, drafting a trustee relationship clause, or serving on a board of trustees, you may wish to hire an attorney for help.