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Questions To Ask Before Becoming A Trustee


A trust is a legal entity that can either hold your assets for you during your lifetime or hold your assets for your beneficiaries after you pass away. A trust must have a trustee, which is someone who administers the trust. In your lifetime, you may be named as a trustee. The following article will discuss some questions that you should consider asking before deciding to become a trustee.

What is a trustee?

A trustee is either a person or organization that holds the legal title of an asset or group of assets for another person, who is referred to as the “beneficiary.” A trustee is granted this type of legal title through the creation of a trust, which is essentially a relationship in which a person that owns assets gives the trustee the right to hold the title to those assets for the benefit of a third party (referred to as the “third-party beneficiary”). Usually, the creator of the trust document (referred to as the “trustor”) chooses who will be the trustee, but in some cases, the court may be required to appoint a trustee. However, neither the trustor nor the court can force someone to become a trustee.

What are some duties of a trustee?

Before deciding whether or not to become a trustee, you should become familiar with some of the duties that trustees have. These duties include:

  • Ensuring that the trust assets are safe and under your control, that you understand the terms of the trust, and that all past account records are in order
  • Investing in such a way as to make sure that trust assets are preserved and productive for current and future beneficiaries
  • Administering the trust according to its terms, which includes properly distributing trust assets to the named beneficiaries
  • Making any decisions that arise according to the provisions of the trust; this may include discretion over when beneficiaries may or may not receive payments
  • Preparing any records, statements, and tax returns as needed
  • Communicating regularly with beneficiaries, including issuing statements of accounts and tax reports
  • Finding answers to any questions you and the beneficiaries may have concerning the trust

What questions should I ask before becoming a trustee?

If you have been named by someone as a trustee, and you are deciding whether to take the role, you should consider asking some of the following questions:

  1. “May I read the trust?” The trust document will tell you exactly what you should do with the funds or other property you will be entrusted to manage. It is important that you fully read it and understand its terms.
  2. “What are the goals of the trustor?” It is important that you ask the grantor about his specific goals for the trust to ensure that those goals are accomplished during your administration of the trust. Furthermore, you may want to consider asking the trustor to put his intentions in writing.
  3. “How much help will I receive?”  You will need to know if you will be working on your own or with a co-trustee. Furthermore, if you are working with one or more co-trustees, you will need to know how duties will be divided. You should also ask whether you will be allowed to hire attorneys, accountants or investment advisors as needed to make sure that you operate the trust properly.
  4. “How long will my responsibilities last?” You will need to know how long you will be expected to serve as a trustee, as well as which situations will terminate your administration.
  5. “What is my liability?” Generally, trustees are relieved of liability in the trust document unless they are grossly negligent or intentionally violate their responsibilities. You should inquire as to your specific liability created under the trust document.
  6. “Will I be compensated?” If it appears from the trust document that your expected duties will be especially demanding, it is not inappropriate to inquire as to whether you will be paid for your services.

Do You Have Questions About Establishing A Trust? Contact our Firm Today.

When deciding to create a trust, it is important to consult an estate planning attorney to ensure that all of your assets are properly disposed of and that all of your wishes are addressed. If you are considering creating a trust, the experienced Norwood estate planning attorneys of Fisher Law LLC can thoroughly explain your options and help you throughout the process.



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