How to Avoid Problems as a Trustee
Assuming the role of trustee is a large responsibility, and you expose yourself to the possibility of legal problems if you are not careful. When a person is named trustee, this means that he or she is regarded highly and considered to have a great deal of integrity. You will need to have help as you take on this duty, and your first consideration should be to hire a College Station probate attorney.
The Duties of a Trustee
As the trustee you have a fiduciary duty to the beneficiaries of the trust. This means that you are legally obliged to act in their best interests in all matters pertaining to the trust and its implementation. As a fiduciary, you are held to a high standard, even more than if you were handling your own finances. Among your specific duties are:
- Protecting assets held in trust
- Investing assets appropriately
- Distributing assets to beneficiaries in accordance with the instructions in the trust
- Maintaining an account of all costs and income
- Filing accurate tax returns and on time
Pitfalls of Being a Trustee
Given that you are in control of assets that ultimately are to be distributed to the beneficiaries, you can expect that your every action will be scrutinized. Should you do anything that can be construed as inappropriate, you may have to answer in court. This is one situation where making mistakes is simply not acceptable. If anything goes awry you are likely to be blamed, and if a court finds that you have been negligent, you can be held personally liable, as well as be removed as trustee.
What You Can Do to Protect Yourself
First, you need to be honest with yourself and decide whether you are up to the challenge of acting as trustee. You have the right to decline the position. If you decide to take on the role, it is imperative that you do everything above-board. Keep all paperwork up to date, and make sure that you protect yourself with receipts and explanations for any expenditure that may be questioned.
It is customary for a trustee to hire an attorney to help in administering the trust. The fees should be paid out of the trust funds and not your fee. A knowledgeable attorney can help you avoid the many pitfalls that can come with working as a trustee. Acting as trustee to an estate can involve very complex legal issues, and without an attorney to guide you it may be difficult to know how to proceed.