The process of collecting, managing and distributing trust assets is referred to as trust administration. The trust administration process can be complicated and relies on the trustee to complete several tasks. The trustee is responsible for carrying out all duties involved in administration efficiently and effectively.
These obligations can vary based on the type of trust and its provisions, but most follow the same general rules.
General Trust Administration Rules And Processes
A few basic rules, guidelines and processes trustees must follow include:
- Fiduciary duty – meaning the trustee has an obligation to act in the best interests of the beneficiaries, be impartial among multiple beneficiaries, and administer the trust prudently. If they fail to do so, they may be held financially responsible for losses or damages.
- Providing notice – the trustee has a duty to provide information to the beneficiaries, including notice of the existence of the trust and the beneficiaries’ rights to information.
- Managing and valuing assets – a trustee must effectively manage and value all trust assets. A full accounting of these assets must be provided to the beneficiaries on a regular basis and when the trust terminates.
- Recordkeeping – careful records of all trust assets including, receipts of income and disbursement of expenses, must be kept by the trustee
- Distribution and transferring assets – when and how assets in the trust are transferred must be supervised and documented by the trustee, depending on the instructions in the trust as well as the type of trust, following all stated conditions and guidelines. The trustee must facilitate the transfer.
A trustee’s responsibilities can be quite extensive, including providing notice to interested parties, transferring titles, investing assets, paying debts, and handling taxes. An experienced estate planning attorney can give you a better idea of all of these duties and responsibilities, so you can ensure your loved one’s trust is carried out efficiently and effectively, while following their wishes.