What does trustee do?

The responsibility of a trustee includes managing and administering the assets held in the trust, distribution of the assets according to the terms of the trust, and tax filings. Additionally, a trustee’s duties include maintaining insurance for trust property, paying the trust’s bills, and acting in the beneficiaries’ best interests.

When appointed, trustees have a good deal of control over the trust’s assets. It is, therefore, necessary to have strict rules in place. Hence, trustees abide by the trust’s terms and avoid possible conflicts of interest.

There are many important aspects of trust administration, but here are the most important rules and policies for trustees. What does a trustee do?

Recordkeeping and reporting. Trustees must keep accurate records of all transactions, and the assets must be visible and available to beneficiaries. Trustees must ensure that they keep careful records of all money and assets and how and to whom they are distributed. Some trustees appoint a professional accountant or money manager to help with this.

Separation of funds and assets. Trustees cannot mix their personal property or bank accounts with trust assets. This commingling is strictly prohibited.

Acting by the trust’s terms. Trustees must ensure that the terms of the agreement are fulfilled and enforced. For example, each trust has established legal responsibilities, such as court action, paying taxes, or distribution of assets.

Responsibility to duties. Once they agree to fulfill their duties, trustees cannot transfer their responsibilities to anyone else.

Avoidance of conflicts. Many trusts have complex terms, especially family trusts. For example, sometimes trustees are also due to act as beneficiaries. When this occurs, the trustee has even more pressure on them to avoid conflicts, especially if it appears they are self-dealing.

It is no secret that both trustees and executors contend with unique challenges. For example, acting by the terms of a trust can be difficult. If the trustee, for example, makes a simple mistake in distributing assets, forgets to record a transaction, or does not follow the terms of the trust, major problems develop.

An experienced business litigation attorney can help trustees and executors make the correct decisions and create a logical framework to support the trust. A skilled lawyer can also answer any questions the trustee or executor may have.

How is a Trustee Different from an Executor?

When an individual is named a trustee of a trust, or an executor of a will, they sometimes are unsure what their duties are. Trustees’ and executors’ responsibilities are complex, and sometimes we confuse the two positions.

When people pass away, emotional reactions are normal. However, everyone deals with death differently, and the goal is for the person to be celebrated and honored after they pass.

However, when people pass, the family must make many important decisions. Executors and trustees are often named to help deal with the future of the person’s estate.

An executor is responsible for overseeing the affairs of the estate. These duties include managing the property and assets, beginning court procedures, and filing the last tax returns on behalf of the deceased.

When named, a trustee becomes the lawful owner of the trust’s assets. The trustee is responsible for dealing with the trust’s assets, which may include the distribution of assets and filing for taxes. For example, suppose an individual’s will dictates that specific assets go to a specific individual. In that case, the trustee takes responsibility for that distributive process.

Both trustees and executors must follow strict legal guidelines. When individuals are named to these roles but do not feel they can fulfill their duties, they can hire a professional to help. Trustees and executors may also be able to step down from their position as needed.

However, most trustees and executors want to follow through on their responsibilities. Nevertheless, they must be careful because each state possesses unique policies, and every situation is different.

This article will cover the roles and responsibilities of both trustees and executors and detail some of the key rules and policies that define these roles. Once individuals understand the guidelines for acting as executors and trustees, they can do so comfortably and effectively.

What Are the Duties of an Executor?

When a person is named an executor of a will, they must act by certain rules. These expectations are extensive, and some would rather not act as the will’s executor.

When this occurs, the person can appoint an alternative or contact an attorney. The attorney will help the person contact the courts to find a new executor acceptable to all parties.

However, if the executor agrees to their new role, there are specific guidelines they must pay attention to. Here are the most common responsibilities of an executor.

Distribute assets to the beneficiaries. One of the executors’ most important tasks is ensuring that the intended beneficiaries receive the intended assets.

Get in touch with government institutions. Executors often need access to estate information such as EINs and other information from the Internal Revenue Service.

Locate legal representation. Executors must ensure that the deceased’s affairs are in strong legal hands, so they need to hire an estate lawyer. They also may need to attend court proceedings or petition the court in California.

Manage the tax situation. Executors must file tax returns and possibly a closing letter with the tax bureau in California.

Manage the estate’s expenses and affairs. Another of the executor’s most integral tasks involves paying expenses and debts, appraising assets, collecting receivables, preparing for liquidity and cash obligations, and possibly creating a probate inventory. A probate attorney may also come in handy during this step.

Write and send out notifications. From public notices in newspapers to notices to beneficiaries, executors must give notice of probate and statutory notice. The goal of these notifications is to inform the public and also the beneficiaries of their interest amounts.

Contact Nakase Wade for Trustee Questions in California

California has unique rules for trustees, just like all states. Likewise, every trustee and beneficiary situation is unique and brings new questions.

While abiding by the terms of a trust can be challenging, it does not need to be difficult. At Nakase Wade, our experienced lawyers can help simplify the trust’s language and make sense of the trustee’s duties. In addition, if disputes arise among beneficiaries or others, we will be there to help make sense of the terms of the trust.

Contact Nakase Wade for a free consultation. We will ensure that your trustee duties are carried out easily and effectively without pressure or stress. Our skilled attorneys know how important the role of a trustee is, and we are here to help.

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