If you’ve been designated as the Trustee in an estate plan, you might be wondering what comes next. And if you’re not, you should be. Because being a Trustee is serious business.

In very basic terms, you have been appointed to administer a trust – that is, gather the assets, pay outstanding debts and distribute the remaining assets to the beneficiaries. It certainly sounds simple enough and, in many cases, it can be.

The key is to get in front of your responsibilities as quickly as possible. Here’s how you do that:

 

Know your trust document.

The most important piece of any trust is the legal document that created it. This can actually consist of several related documents, depending upon the kind of trust you’re overseeing and it is your responsibility to understand this document thoroughly.

Your trust document should tell you everything you need to know about your responsibilities as Trustee, including details about the assets of the trust, how and when they’re to be distributed, reporting requirements and of course, your authority and limitations as the Trustee. It’s a good idea to review the Trust and make sure you understand it’s terms prior to getting started.

Granted, trust documents are drafted by attorneys, so be prepared for some legalese. And remember, the more complicated the trust, the more complicated the language is likely to be.

 

Be realistic about your time.

There is no hard and fast rule about how long the trust administration process should take because every trust is different. Many trusts are intended to be dissolved upon a final distribution of assets, for example, while an ongoing trust may require a long-term commitment. The complexity of the assets, the terms of the trust itself, and the debts that must be paid will all have an impact on the amount of time needed to fulfill your duties as a Trustee.

So, relax. It’s expected that you’ll need a little time. And legally, you have it. But that time is not without its limits.

The official expectation here is “reasonable,” and that can be interpreted in different ways by different people. How long will it take you to gather and account for all the assets in the trust? That will depend upon the assets you’re gathering. The problem is that the beneficiaries of the trust may not appreciate the challenges involved, especially when they’re waiting on a distribution and that’s where the term “reasonable” comes into play. If the beneficiaries feel that you’re not fulfilling your duties in a reasonable amount of time, they can ask the Court to step in and you’ll be expected to show that you’re meeting that reasonable standard.

This is why reporting and accounting are so essential to this process and it’s why you need to be prepared before you assume the role of Trustee. Trust administration can involve quite a bit of work; getting a handle on what will be expected and how you’ll go about doing it will help you avoid (or at least minimize) potential headaches along the way.

 

Ask for help.

Unless you are a lawyer or professional fiduciary, it’s expected that you might need some help while acting as a Trustee. Trust administration can be complicated and it’s not unusual to suddenly find yourself well outside your comfort zone.

So, ask.

As a Trustee, you have the right to bring in the help you need, whether it’s to explain a legal concept, outsource a particular function or simply provide direction with a specific task. Again, the requirement here is “reasonable” since the trust is paying for the assistance and ultimately, you’re still responsible for the end result. But even with that liability resting on your shoulders, it’s much easier to prove your due diligence (should something go wrong) if you’ve enlisted the guidance of professional advisors.

And this is where we can help.

Santa Barbara Fiduciary has served as a trusted partner of individuals and families for more than a decade, providing fiduciary guidance, services, and solutions based on a thorough understanding of each client’s unique situation and goals. We can help you manage and successfully meet all the expectations that come with being a Trustee. You only have to ask.

Contact us today!