It’s no misnomer that a position with so much responsibility carries the name trustee. After all, you have been entrusted with a solemn responsibility and you no doubt want to do the best possible job.
Here are 10 things to do when you are appointed trustee of a trust:
- Read the trust document, which sets out the rules that govern how you will manage and administer the trust. Be sure you understand these rules completely.
- Create a checking account for the trust. A separate checking account for the trust should be used to handle all expenses and income, and will enable you to track distributions and payments.
- Keep the beneficiary’s best interests in mind. You have a fiduciary duty to all beneficiaries to perform your duties according to the law and in their best interest.
- Do not borrow from the trust. You should never use the trust for your own personal needs.
- Provide an annual report. You will owe an accounting at least annually to all beneficiaries and anyone else with an interest in the trust.
- Invest the funds prudently. Diversify the portfolio among stocks and fixed income securities. Unless you are an investment professional, it is wise to get professional advice.
- Understand the needs of the beneficiaries. Stay in regular contact with the beneficiaries so you understand their needs.
- Be aware of any conflict with public benefits. Be sure you are aware of any beneficiary receiving public benefits to ensure any distribution does not disqualify them from those benefits.
- File income tax returns. You are required to file an annual income tax return on behalf of the trust.
- Get advice. Call Pierchoski Estate Law to ensure you are fulfilling your role as trustee correctly and legally. Special reduced rates are always available if you are a Trustee for an Estate Plan we created and your first visit with us is free of charge.
Contact Pierchoski Estate Law for help at 931.363.7222.