If you are using a trust as part of your estate plan, it is crucial that you choose a trustee who will be the right person to handle your trust after you pass. You are giving this person access to your assets and a lot of influence in how things unfold after your death. And, if you have been appointed as a trustee, you have been given the meaningful duty of ensuring your loved one’s wishes are fulfilled. Whether you are naming a trustee or have been named one, you need to understand the full scope of what a trustee’s responsibilities are. Below, you will find a list of a trustee’s legal and moral responsibilities.

A Trustee’s Responsibilities:

Give Notice of Appointment as Trustee.

Your first responsibility as a trustee is to notify the beneficiaries of the trust that you are the trustee and will be managing the trust’s assets. This is mandated by Virginia state law.

Manage and Distribute Assets According to Trust Agreement.

Once you’ve contacted the beneficiaries of the trust, it is time to begin managing and distributing the assets in the trust. You must act in accordance with the written trust agreement. Depending upon what the trust agreement says and what kind of assets the trust owns, this may require several different action steps from you, such as:

  • Setting up a bank account for the trust. A trust typically need its own tax id number. This is something the trustee must do after the trust creator dies.
  • Taking copies of the death certificate and certificate of trust to banks and other financial institutions and using them to acquire the funds held in those institutions. You can should then be able to deposit the funds into the trust account, and from there, distribute them to the beneficiaries.
  • Distributing any real property in the trust. This may require you to retitle the property into the beneficiaries’ name(s), or, potentially, to coordinate the sale of the property.
  • Dispersing all tangible property to beneficiaries as instructed in the trust agreement.

Disperse Specific Items According to Gifts and Memories List If Applicable.

For specific items that are not listed in the trust agreement, you will need to distribute them to designated people according to the deceased’s Gifts and Memories List if they created one. The Gifts and Memories List is also sometimes called a Personal Property Memorandum.

Record the Pour-Over Will.

Many people who create trusts also create a pour-over will to catch any assets that, for whatever reason, do not make it into the trust. You may need to record this pour-over will with the court.

File Tax Returns for The Trust If Necessary.

Depending on the assets in the trust and what kind of income it brings in, you may have to file taxes for it.

Manage Funds for Under-Age Beneficiaries.

If the trust beneficiaries are under-age, you will be responsible to manage their funds for them until they reach the age where they can receive the lump sum of their inheritance.

Provide Reports About Use of Assets to Beneficiaries as Required by State Law.

This will require you to keep very clear records of how you use the trust’s money to care for the beneficiaries.

Pay Off any Debts of Decedent.

Depending upon what kind of debts are owed you may have to pay off the decedent’s creditors. This may include taxes and funeral expenses.

Act In the Best Interest of The Beneficiaries.

As trustee, every decision you make with the trust and its assets must be in the best interest of the Both the beneficiaries and whomever is named as backup trustee has the right to keep you accountable, and they can file suit against you if they believe you are acting heinously.

Follow any Other Instructions in The Trust Agreement.

Every trust agreement is different. It is your responsibility as trustee to carry out any other general instructions that may be included in the trust agreement.

 Please note that because a trustee’s responsibilities are not overseen by the court, this checklist is somewhat fluid. The order in which these tasks should be accomplished is dependent upon the trust agreement and the estate’s details. Some of these do not apply to every trustee. If you have been named trustee of an estate, we recommend you speak with an estate attorney about what your trustee responsibilities are and how you should carry them out.

Need more information about trustee responsibilities in Virginia or West Virginia? Give us a call!

Disclaimer: The information you obtain in this post is not, nor is intended to be, legal advice. This blog shares general best practices when navigating Virginia or West Virginia law, but you should consult an attorney for advice regarding your individual situation.

 

Joshua E. Hummer, Esq. is the founder of Relational Estate and Elder Law, and he has been a practicing attorney for over 15 years. While experienced in many parts of the law, Josh specializes in estate planning, estate administration, and elder law. He is licensed in both Virginia and West Virginia. Josh’s passion lies in helping people gain peace of mind about the future through holistic legal planning. When he isn’t meeting with clients or crafting legal documents, Josh enjoys spending time with his lovely wife, Jill, and their four vibrant children.