If you have recently been named as a trustee upon the death of a loved one, or a family member has asked you to take on the responsibility in the event of their death, you probably have a lot of questions. It is a big responsibility in many ways, but you were picked for a reason. You are a trustee because, put simply, they trust you.
There are a few things that you need to know right away. Here is a guide to what you need to do to be sure that you are up to the task that you have been trusted to do. You may also want to have your own attorney, simply for consultation, just to make sure that you are doing everything correctly.
The first thing to do
When you are named as a trustee, the most important first task is to read and understand the trust documents. Every trust is created for a specific purpose, and you will be tasked with making sure that this happens. Key items include:
- All beneficiaries of the trust. Usually, it is the children of the person who has set up the trust in their will, but it may include other family members, pets, or charities.
- Any co-trustees or administrators. You are probably not alone in the administration of this trust. A bank or law firm may be named as a co-trustee or an independent investment advisor. In all such cases, you will need to talk with them, as they are the professionals.
- The assets of the trust. Very often insurance policies are put into trusts to be paid out to surviving children or other beneficiaries. But if there is a sum of money or a business, it’s important to note what you will be administering.
- The term of the trust. Many trusts have a specific expiration date, such as when the child turns 25 years old or the beloved animal dies. At that date, any remaining money will go to whatever is specified by the trust.
There is a lot to know, but these are the basics. As a trustee, you are being asked ti execute a very specific set of instructions and you need to understand them.
What is your job?
Primarily, you are being trusted to be organized, execute the plan, and keep good records. That is pretty much it as a trustee.
You may be entitled to some compensation for your work, but in many cases where a family member has asked you to be a trustee it is because you are expected to do it for love.
Any further questions?
There are certainly going to be more questions as you get into the operation of the trust. It is very wise to at least consult with an attorney experienced in trust administration, if for no other reason than your own peace of mind. It can be the attorney who drafted the trust, but you may feel more comfortable with another opinion to be sure that you are doing what you were asked to do.
It is a great honor to be a trustee for a loved one, and you want to take it very seriously. It’s not that difficult, but you do have to pay attention to details. Don’t be afraid to ask for help and remember what the trust is for and you will do well. Always remember, they trusted you for a reason.