A Good Trustee and Their Duties

What makes a person a good Trustee? What are their duties? A trustee is a person or entity that holds and manages property or assets for the benefit of one or more beneficiaries. The trustee has a fiduciary duty to act in the best interests of the beneficiaries and to manage the trust assets prudently and responsibly.

Some of the key duties of a trustee include:

• Duty of loyalty: The trustee must act solely in the best interests of the beneficiaries and avoid any conflicts of interest that could compromise their loyalty to the beneficiaries.
• Duty of prudence: The trustee must manage the trust assets with care, skill, and caution, and make informed investment decisions that take into account the risks, returns, and diversification of the trust assets.
• Duty of impartiality: The trustee must treat all beneficiaries fairly and impartially, and avoid favoritism or discrimination among them.
• Duty to follow the terms of the trust: The trustee must abide by the terms of the trust instrument and carry out the wishes of the trust creator as expressed in the trust document.
• Duty to keep accurate records: The trustee must keep detailed and accurate records of all trust transactions, including income, expenses, and distributions, and provide regular accountings to the beneficiaries.
• Duty to communicate with beneficiaries: The trustee must keep the beneficiaries informed about the trust’s assets, investments, and distributions, and respond to their reasonable requests for information.

In general, a trustee is required to act in the best interests of the beneficiaries and manage the trust assets responsibly and prudently. If a trustee fails to fulfill these duties, they may be liable for any losses or damages that result from their breach of fiduciary duty.

Selecting a trustee for your trust is an important decision that requires careful consideration. There is no one-size-fits-all answer to this question, as the best trustee for your trust will depend on your individual circumstances and needs.

Here are some characteristics to consider when selecting a trustee:

1. Trustworthiness: The trustee should be someone you trust to act in the best interests of the beneficiaries and manage the trust assets responsibly and prudently.
2. Financial expertise: The trustee should have some knowledge of finance, accounting, and investing, or be willing to seek professional advice to make informed investment decisions.
3. Availability: The trustee should be someone who is available to manage the trust assets and carry out the terms of the trust over a potentially long period of time.
4. Impartiality: The trustee should be able to treat all beneficiaries fairly and impartially, even if they have personal relationships with some beneficiaries.
5. Age and health: Consider the age and health of the person you are selecting as trustee, and whether they are likely to be able to fulfill their duties over the long term.
6. Succession plan: It is a good idea to name a successor trustee in case the original trustee is unable or unwilling to continue serving.

Some common choices for a trustee include a family member or friend, a professional trustee such as a bank or trust company, or an attorney. It is important to discuss the responsibilities and expectations of being a trustee with the person you are considering, and to seek their consent before naming them as a trustee.

In some cases, it may be appropriate to have co-trustees, with different individuals or entities handling different aspects of the trust administration, such as one trustee handling investments and another handling distributions. Ultimately, the choice of trustee will depend on your individual needs and circumstances, and it’s a good idea to consult with an estate planning attorney to help you make an informed decision.

If you have any difficulty navigating who to appoint as your trustee, contact us today at 703-558-9311 to schedule your free consultation with us or click here to fill out our contact form and we will contact you. We serve families living in Virginia, the District of Columbia, and Maryland.