Posted by Trent Accounting

Duties Of Trustees

Duties Of Trustees

First of all we will discuss what is meant by trust administration? When the creator of a trust passes away, the person who is appointed to take care of the trust; the trustee, has the responsibility of managing and looking after the affairs of the trust of the dead person. 

Therefore, the responsibility of the appointed trustee is that he has to administer the true assets and distribute then in accordance with the guidelines listed in the trust agreement contract. The precise responsibilities of the trustee are dependent on which type is trust he is expected to look after along with rules, guidelines and requests that are present in the trust agreement.

Trust administration and the duties of trustees

So let us look at some of the responsibilities that come under the concept of Trust administration and the duties the trustees are expected to perform:

  • They are expected to identify and manage record of all of the trust’s assets
  • Uphold the tax and bank register for the trust
  • They responsibly protect the assets till the time comes when they need to be distributed to all the recipients who are listed in the trust agreement.
  • The take the initiative in defining the fair market share value of assets in the trust
  • They pay the legal financial bills and all the money that the maker of the trust was indebted to pay in his lifetime
  • They pay the concluding income tax and if there is a need of filing a federal estate tax return, they file the tax return accordingly and pay the estate taxes.
  • Until the heirs listed in the trust agreement contract are capable of taking charge of the trust, the trustees have the authority to manage the trust assets in a far-sighted manner that may include investing, reinvesting and selling certain assets of the trust.
  • The trustee ensures that the assets can only be distributed among the listed heirs of the trust if all the official taxes, pills and payments are cleared. Once all these debts are cleared, then the remaining true assets can be distributed among the legitimate beneficiaries of the trust as per the guidelines and instructions listed in the trust agreement contract.

So, these duties and the obligation of the trustee shows that looking after and managing the affairs of the trust is no walk in the park. These duties require utmost consideration and accountability from the side of the trustees. Therefore, for this purpose, it is advisable that the trustee seek the assistance of an accountant, tax preparer and an experienced attorney so that the administering process goes smooth with compliance to the trust agreements and the federal laws regarding taxes.

Steps of trust administration process

Up till now we are clear that the appointed trustee, according to the pointers of the trust agreement is responsible for looking after the affairs of the trust till the time the legitimate beneficiaries take charge. However, in order to administer an effective control and management of the trust as per the guidelines listed in the trust agreement deal, the trustees need to follow certain steps. So, let us now see how this process starts:

  • The process of trust administration begins with a compulsory notice given to all the heirs and legal beneficiaries of the trust. Once, the recipients receive the notice, they have to file, for trust contest in a specific time period. If he fails to do so within the proposed time, then the appointed trustee will have to look after the affairs of the trust
  • If the trust of the deceased is a property, then the appointed trustee is bestowed with a successor title that would ensure that he is the sole responsible individual of taking care of the property according to the trust maker’s wishes. For this purpose an official declaration is required along with the copy of the death certificate of the trust maker. These legal formalities are essential for the transfer of authority from the deceased trust maker to the appointed trusty. The purpose of the affidavit is to record the transfer and change of ownership from the settlor to the trustee.

As mentioned before, trust administration is a difficult process and requires a lot of accountability from the part of the trustee. So, it is always better to take help from an experienced attorney in the managing process, paying of bills, taxes and dues of the deceased and distributing the assets among the heirs as per the instructions in the contract.

Trent Accounting