When you are named the trustee of a trust, you may feel honored that the person who created the fund trusted you enough to put you in charge. However, if you’re unfamiliar with the responsibilities of this role, you may be surprised by all the responsibilities. As such, if you’re ready to take on this responsibility, it’s important to understand what mistakes trustees commonly make and how to avoid them. You’ll also learn why you should work with PA trust attorneys to help ensure you take the correct steps to honor your loved one’s wishes.
What are the responsibilities of a trustee?
If you have been named the trustee of a loved one’s trust, it’s important to understand what this means and what the process entails. You should know that the moment you accept to serve as the trustee, you are now under something known as a “fiduciary duty.” As such, you are held to the highest legal standard possible when you act on behalf of another person. Essentially, this means you must act in the best interest of the party whom you are serving on behalf of.
As the trustee, you are assuming legal ownership over the trust. Your responsibilities include administering the trust according to the terms of the document, managing the assets held in the trust according to the terms of the document, and using and distributing the assets as per the wishes of the testator.
What are common mistakes trustees make and how do I avoid them?
If you are a trustee, understanding the most common mistakes you may make is critical. Generally, one of the most common errors people make is letting emotions get the better of them. As you are likely related to the trust’s creator, conflict can arise between you and the other beneficiaries, who are likely your family members. Though you may be impacted by these issues as a relative, it’s important to stay objective when acting as the trustee. Failure to do so can escalate matters to a bitter court battle.
Another common mistake trustees make is failing to communicate with the trust’s beneficiaries. While missing a phone call from a beneficiary every once in a while is perfectly okay, purposely ignoring the questions and concerns of beneficiaries can benefit you, as failure to do so can have intense legal and financial consequences. As such, maintaining open and honest communication is essential.
If I need help, what should I do?
As you can see, becoming the trustee of a trust fund can be an overwhelming and confusing process, complete with many challenges. Unfortunately, if you violate your fiduciary duty, you can face legal repercussions, with potential jail time. However, if you are up for the challenge, it’s imperative to understand that it is in your best interest to connect with an experienced attorney who can help guide you through the challenges you may encounter.
At Friedman Schuman, our dedicated firm will do everything possible to assist you through these challenging times. Connect with us today to learn how we can assist with any issues you may have as a trustee.
