What Does a Trustee of a Trust Need to Do?

When a trust is created as part of an estate plan, the trustee will have a significant role in the management, investment, distribution, and administration of that trust. The trustee’s role is significant: they manage the trust on behalf of the trust beneficiaries, serve as legal owners of the trust, and essentially hold the keys and guard the gate of the trust.

Because of this significant role, a trustee has a number of legal responsibilities, called fiduciary duties, to act in the best interest of the grantor, the beneficiaries, and the trust. An experienced Texas estate planning attorney can advise you on the duties of the trustee, whether you have been appointed as trustee of a trust, are a grantor of a trust, or its beneficiary. 

What Are the Duties of a Trustee?

Duty of Loyalty

The trustee has the duty to act in the best interest of the beneficiaries and must not engage in self-dealing, which means acting in their own self-interest.

Duty to Keep Accounts

Trustees must keep accurate, up-to-date accounts of a trust. Trust beneficiaries can request that the trustee provide a yearly accounting of trust transactions. 

Duty of Care

The trustee has the duty to perform their role as diligently as an “ordinary prudent person,” meaning someone no more or less cautious than the average person. 

Duty Not to Delegate

The trustee must personally administer the trust and may not delegate their duties, with certain limited exceptions for hiring professionals such as attorneys and accountants.

Duty to Preserve Trust Property

Using the level of skill of a person of “ordinary prudence,” the trustee must act to preserve the trust assets. The trustee is accountable to the beneficiaries for any trust property and for profits made. 

Duty to Defend

The trustee must do everything that could reasonably be done to defend the trust from the claims of third parties. 

Duty to Enforce Claims

On the flip side of the coin, the trustee has a duty to enforce any claims that the trust may have against third parties. 

Duty Not to Commingle Trust Funds

The trustee must not mix trust funds together with personal funds or together with funds of other trusts the trustee administers. The trustee must take care to keep trust funds separate even if several trusts participate in one investment together.

Duty of Impartiality

The trusty must treat all beneficiaries the same, meaning he may not favor one over another. 

Call a Fort Worth, TX Estates and Trusts Attorney

The trustee plays a large role in the administration and management of a trust. An experienced Fort Worth, TX estate planning attorney can provide advice on the roles and responsibilities of a trustee. Call Gonzalez Law, PLLC at (817) 349-7330 for a free consultation.