What You Should Know About Duties of a Trustee (in 200 words or less)
1. Investments
A trustee has a duty to exercise care, diligence, and prudence in handling trust assets. This duty includes a responsibility to choose appropriate investments. In addition, a trustee must monitor and protect all trust assets and verify regularly that the titling of each asset is correct.
2. Distributions
A trustee must determine who the beneficiaries are and follow the terms of the trust regarding when and how to make distributions.
3. Notices
A trustee has a duty to communicate regularly with each of the beneficiaries. In Arizona, the minimal requirement is to send a trustee’s report to each current beneficiary of an ongoing trust, and other beneficiaries who request it, at least annually. The report must include specific information about the trust’s assets, its income and distributions, and the trustee’s compensation, if any.
4. Taxes
A trustee should make certain that income and other tax returns are filed in a timely manner. This may require retaining the services of an accountant. In order to satisfy this duty, it is essential that the trustee keep careful records of all transactions involving the trust.
About the Author
Thomas J. Bouman provides legal counsel in the areas of estate planning, estate settlement, and asset protection. He brings a highly systematic approach to the practice of law, which is critically important when wading through the complex, and often bizarre, legal requirements associated with estate and trust law. Mr. Bouman is author of the Arizona Estate Administration Answer Book and a prominent member of Wealth Counsel, LLC, the nation’s premiere organization of estate planning attorneys.
A trustee has a duty to exercise care, diligence, and prudence in handling trust assets. This duty includes a responsibility to choose appropriate investments. In addition, a trustee must monitor and protect all trust assets and verify regularly that the titling of each asset is correct.
2. Distributions
A trustee must determine who the beneficiaries are and follow the terms of the trust regarding when and how to make distributions.
3. Notices
A trustee has a duty to communicate regularly with each of the beneficiaries. In Arizona, the minimal requirement is to send a trustee’s report to each current beneficiary of an ongoing trust, and other beneficiaries who request it, at least annually. The report must include specific information about the trust’s assets, its income and distributions, and the trustee’s compensation, if any.
4. Taxes
A trustee should make certain that income and other tax returns are filed in a timely manner. This may require retaining the services of an accountant. In order to satisfy this duty, it is essential that the trustee keep careful records of all transactions involving the trust.
About the Author
Thomas J. Bouman provides legal counsel in the areas of estate planning, estate settlement, and asset protection. He brings a highly systematic approach to the practice of law, which is critically important when wading through the complex, and often bizarre, legal requirements associated with estate and trust law. Mr. Bouman is author of the Arizona Estate Administration Answer Book and a prominent member of Wealth Counsel, LLC, the nation’s premiere organization of estate planning attorneys.