Well, if you find yourself in a situation where you have been made a trustee for the first time, things can get complicated. It’s nothing out of the ordinary, but for the people who are n this situation for the first time, it doesn’t come off as something easy. Some obligations and responsibilities come with this position.
Even if you’re not counting on being one ever, it is better to know a few facts about the process. If you have already been made one, you need to read this article. In a case you’re a successor trustee, you are not in a pinch.
Your duties will come in power only when a successor dies, or is unable to take care of his assets due to a medical or any other condition. If you have already been made a trustee, you need to know that a certain level of action is expected from you. It’s not like you can stay still or pretend to be dead.
So, if you’re in any way involved with a living trust, you need to be aware of the burden that position carries with itself. So, if you don’t want to be caught by a surprise please check out our what does a trustee of an estate do – 2023 guide. You’ll find some interesting bits that could help you down the road in this endeavor. But, first, let us see what is trust?
A Few Words About The Trust
When it comes to trusts, everything is completely legal, and they are entitled to own assets through their legal presence in various circumstances. It all starts with forming a document which in many regards appears to be a will, but with a bit different content. It holds the grantors will about the person which will handle their affairs after death happens or a condition that will make the grantor unable to handle his affairs.
The first condition of creating trust is that there are assets to be handled after one’s death. It is formulated in a manner in which in all major roles the name of the grantor is replaced by the name of the trustee.
The grantor manages all the affairs with his attorney at law, which is in charge of forming the document and managing the transfer of the power from the grantor to the trustee. While this might get complicated when first faced with the issues, in essence, everything is straightforward.
Once you’re faced with the situation on hand, you might want to get professional help, which would make the transition all that much easier if you’re ever in a position to be a trustee. Sometimes, the matter can be even handled by impartial individuals such you’ll find if you check out the State Trustees.
What Are Your Responsible For?
The one thing most people get wrong once they are in the position to be a trustee is that they’re allowed to move the assets as if they were their own. This is a big no. It is not like that at all. At all times during your time as a trustee you need to tell yourself:’ These are not my assets.”
Keep it real. Yes, you’ll be pushed into a position of responsibility but you’re not entitled to anything. Your job will be more of a guarding dog. The grantor will leave the assets for you to guard them, and make sure they’re transferred where they should be. The beneficiaries are those who will receive the assets, and once the grantor is alive but unable to handle his affairs it will be your work, but you are in no way enabled to control the assets at your will.
If you try something like that you could find yourself quickly in a Knives Out scenario. You know, the flick starring Daniel Craig? Movies, Hollywood, and Netflix aside, what you should know are your basic responsibilities when it comes to this duty. It is by no means an easy task and carries a big burden, and a huge amount of care is needed to do the job the right way.
The first thing you need to do is to set things straight with yourself and the grantor. When it comes to your assets, you need to have them separated from the ones you’ll be possessing for a time while you’re a trustee. Furthermore, you’re not free to use the funds you’ll be handling to take care of your affairs. This is illegal.
Only in the case, the grantor stated that you’ll have an access to the funds at your will, you’re allowed to put your hand in the honey jar. It is always good to have in mind that the trust is intended for the beneficiaries. If there is more than one, utmost care is recommended.
You’re not allowed to have favorites. Matters are much easier when there’s only one of them. But in the case of a trust, there are always a few thus the trustee is needed. So, you’ll be probably approached by most of them, but you’re not allowed to have advanced or to pick favorites. In front of you, they all need to be the same.
In some cases, a trustee is asked to handle the tryst as an investment fund. While investing can be fun and games, it’s not up to you to take risks. The growth is expected, or at least the assets are not diminished. If you opt for a risky business move in terms of investment (Bitcoin we’re looking at you) you’d be overstepping your boundaries.
Also, making risky investments and tracking returns would be difficult for anyone not fully invested in the matter. As a trustee one of your primary jobs is to keep track of the money trail, file tax returns, keep records of every transaction, and report to the beneficiaries about all of this.
Yes, now that you’ve reached the end it does seem like a bit of a hustle. But, rare is the movie moments when you become a trustee all of a sudden. In real life, you’ll probably be aware of the developments which will give you time to set up yourself for success.