In estate planning, the term “trustee” is often tossed around, but many people do not know what a trustee actually does. In short, a trustee is a person that administers the property or assets for a third party, often for a trust fund or retirement plans and pensions. While the specific duties of a trustee depend on the trust document and what assets are held in the trust, the following describes the duties of trustees and addresses a few of the more common questions people have about a trustee’s responsibilities.
What are a Trustee’s Duties?
First off, the trustee has the responsibility to safeguard the trust assets and act in furtherance of the trust’s goals. Trusts will often have a trust agreement, which specifies how a trustee utilizes the assets in the trust and specific details regarding its management. As such, the trustee must keep accurate records, file tax returns, and report any activity to the beneficiaries, those who are to receive the assets, as required by the trust. Trustees are the decision-makers for any issues that arise regarding the trust and must make the decision based on the trust agreement and with the interests of the beneficiaries in mind.
Who Can be a Trustee?
Often, individuals with a trust choose to be their own trustee, for as long as possible. For example, an individual can be the trustee for their own trust, if the purpose is to provide money for their grandchildren’s education. Married couples often serve as co-trustees, so when one person passes away, the other spouse can handle their affairs without needing to go through the process of finding a new trustee. A firm can also serve as a trustee, as they will have advanced knowledge about what is required to competently oversee a trust.
Can a Trustee Be Removed?
Trustees have a fiduciary duty, which means they have an obligation to follow the terms of the trust agreement and act in the beneficiaries’ best interests. There are legal grounds to remove a trustee, including if they violate the trust requirements, mismanage the trust assets, or are unable to cooperate with the beneficiaries. Trust agreements often have a provision that allows the beneficiary to replace or remove the trustee. As each trust is unique, the ability to remove a trustee depends on the language of the trust agreement. However, there is always the ability to petition the court to remove a trustee, if a beneficiary has proof that the trustee violated the terms of the trust agreement or has breached their fiduciary duty.
Because trusts, and replacing a trustee, can often be a complicated process, individuals considering this option should contact an experienced estate planning attorney who can review all of the possibilities.
Contact a Houston Estate Planning Law Firm Today
If you or a loved one is interested in finding a trustee to manage your trust, or have questions about updating your trust, contact the dedicated Houston estate planning attorneys at McCulloch & Miller, PLLC. Our attorneys have decades of hands-on experience handling estate planning and elder law issues, including creating and updating trusts for Houston residents. We understand that every person has unique needs, and we will work to ensure your wishes are met. To schedule a consultation, call us today at 713-333-8900.