What Are The Duties of a Trustee?

Generally, trustees are responsible for managing, investing, and distributing the property in the trust. This includes administration and accounting, paying any taxes on behalf of the trust, working with beneficiaries to determine their goals for the trust, and working fairly and with transparency around issues of management, investments, and distributions.

Managing trust assets

The trustee is responsible for the accounting and administration of the trust. This includes preparing and filing income tax returns for the trust, paying those income taxes from the trust, and adhering to any and all applicable state and federal laws around trust administration. The trustee must also keep accurate records of all trust-related transactions.

Investing trust assets

The trustee is responsible for investing the trust assets so that those assets earn income for the beneficiaries. Depending on the needs of the beneficiaries, the trustee is responsible for determining whether to invest the principal to earn income, to grow the principal in the trust, or other goals that the beneficiaries might have.

Distributing trust assets

The trustee must follow the instructions of the trust in distributing income or property to the trust's beneficiaries. The trustee must make these distributions in a timely and responsible manner.

For advice on how to pick someone to serve as a trustee, see our article How to Choose Trustees.

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Jargon Decoder

Trusts

A place where you put money or assets to protect it from taxes, or keep it safe for minors and irresponsible spenders.