A Trustee is someone who holds property in the Trustee’s name for the benefit of another. A Trust is beneficial because, if properly funded, it can help families avoid probate proceedings, which cost time and money. A Trust is created when a Settlor (the person setting up the trust) transfers property to a person designated as a Trustee (the Settlor is usually the initial Trustee ). A successor Trustee becomes the Trustee upon the death, incapacity, or resignation of the Trustee. While it is not required by law, it is recommended that the Trustee obtain a document, such as an Affidavit of Successor Trustee, to present to people and institutions to evidence that the Trustee has authority to act as the Trustee.
The Trustee has a duty to take reasonable steps to take control of and protect the Trust property, which includes locating and reviewing the Trust documents and determining what property is held in trust. The Trustee must also collect any property designated by a will to be placed in the Trust by transferring ownership of such property into the Trustee’s name.
The Trustee must notify the beneficiaries of the Trust of the existence of the Trust. If the Trustee and the Personal Representative of the decedent’s estate are not the same person, the Trustee must work with the Personal Representative to ensure that the administrative matters of the estate are taken care of. This includes: obtaining death certificates of the decedent; locating the Will of the decedent (if there is one); and coordinating the payment of the decedent's bills, expenses of last illnesses, and funeral costs. The Personal Representative and Trustee must also coordinate when distributing the assets of the decedent’s estate.
The Trustee owes a strong fiduciary duty of good faith and loyalty to all beneficiaries of the Trust. This means that the Trustee must act with reasonable skill, care, and caution to carry out the terms of the Trust as they are written. The Trustee must also act impartially if there is more than one beneficiary. The Trustee must keep a detailed record of the management and distribution of Trust property. The Trustee must also keep the beneficiaries reasonably informed and promptly provide the beneficiaries information regarding the administration of the Trust upon request. Legitimate claims of creditors of the decedent's Trust estate must be paid off with the Trust property before distributions of the Trust estate are made to any beneficiaries.
If you have any questions about Trusts or your Estate Plan, please call us at 801-447-5577.
Concordia University School of Law
Law Student Summer Extern (Summer 2019)