There is a certain amount of responsibility that goes along with wills or trust administration. For this reason, it is vital to choose someone very trustworthy to take on this important role. While some individuals will likely see it as an honor to be chosen, it can also be quite a burden, so it is highly recommended that the potential trustee be contacted in advance and asked if he or she is willing and able to take on the role.
If you find yourself in charge of trust administration or are in the process of trying to choose an appropriate trustee for your own estate, here are some very important aspects of the job which should be at the top of your list of responsibilities.
- The person in charge of trust administration must be able to be impartial. This means that family feuds, sibling rivalries, and other real or imagined slights cannot be allowed to interfere with the fair and honest administration of the trust.
- The trust assets should be insured, and if they are lost or destroyed due to the trustees’ negligence, he or she can be held liable. It is also the trustee’s responsibility to file and pay taxes for the trust and take care of other trust-related expenses.
- He or she is responsible for ensuring that the trust produces income. This means the money can’t just sit in a checking account, rather it needs to be invested wisely so it generates income for the beneficiaries. The trustee also distributes this income to the beneficiaries.
- Speaking of investments, many states require the trustee to make prudent choices when it comes to those investments. It is usually helpful to speak with an attorney or financial advisor in order to make wise decisions and to find out what specific regulations apply. In fact, it is the trustee’s responsibility to use his or her best judgment to choose an investment agent to handle the delegation of investments if the trustee isn’t qualified to choose them on his or her own.
- The beneficiaries of the trust must be informed of the activity of the trust. This includes informing them of the trust and the trustee’s role in the trust, supplying required documentation when requested, and providing all beneficiaries with an annual statement of the accounts.
- The person in charge of trust administration must be able to avoid conflicts of interest and cannot make decisions which favor the trustee over other beneficiaries.
Proper trust administration in Maryland requires a combination of personal integrity, business savvy, and interpersonal skills. When choosing a trustee or accepting the position, it is a good idea to speak with a trust lawyer to ensure that you fully understand the responsibilities that accompany the position.
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About Nicole K. White
After losing a close relative, Nicole witnessed the devastation, enormous expense and chaos caused by not having a simple estate plan. It is Nicole’s mission to educate parents, especially single parents, about protecting themselves, their families, minor children, and assets with comprehensive Estate Planning.
