Trustee definition
/What is a Trustee?
A trustee is someone who is legally responsible for trust assets. This person administers assets as mandated in the instructions associated with a trust. In many cases, the person who created a trust steps into the role of trustee, and stays there until he or she is incapacitated. From that point onward, a successor trustee takes over responsibility for the trust assets. A trustee must put the interests of the trust beneficiaries ahead of his or her own interests at all times, or could be liable for the mis-management of trust assets.
A common person to assign the trustee role is an attorney. Many attorneys are trained in asset management, and so can provide professional oversight. However, their fees will cut into the amounts that beneficiaries will receive from the trust. Another option is to assign the role to a friend or family member, which can cut administration costs; the downside of this approach is that the designated person might not manage the assets in a professional manner, resulting in unnecessary asset losses.
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Trustee Responsibilities
A trustee has a number of responsibilities. First, a trustee must take on the role of a fiduciary, managing assets on behalf of the grantor. Second, the trustee must administer the trust, which involves recording all transactions appropriately and distributing assets in accordance with the wishes of the grantor. Third, the trustee must ensure that all trust assets are properly managed, so that the risk of loss is minimized. Similarly, the trustee must make decisions about where to invest excess funds. And finally, the trustee must file trust reports, both to the applicable governments and to the beneficiaries of the trust.
What is the Role of a Trustee?
A trustee invests the assets within a trust, oversees the use of physical trust assets, accounts for them, and disburses assets to any designated beneficiaries. The trustee will also need to periodically file tax returns.