Trusts are extremely valuable in protecting, preserving, and controlling a person’s assets while minimizing federal and state taxes. In many ways, a trust is more flexible at managing an estate’s assets and minimizing the cost of settling an estate than a Will. After a person passes away, a named Trustee, or Successor Trustee, will effectively distribute assets to heirs in line with the provisions of a trust without having to go through the court process of probate.
A Trustee is the individual responsible for managing a trust and is similar to the Executor of a Will. However, instead of going through the probate process, a Trustee will manage a Grantor’s assets until they are distributed to the beneficiaries. This process may feel overwhelming and burdensome for a Trustee due to their various responsibilities, but guidance is available with an experienced elder law attorney. If you have been designated as an acting Trustee, speak with an attorney about managing the process and tasks.
Key Responsibilities of a Trustee
Whether a person creates a revocable or irrevocable trust, they will appoint a Trustee and likely a Successor Trustee who will be in charge after they pass. A Successor Trustee will “step into the shoes” of the primary Trustee and assume all of the same responsibilities. In a revocable trust, the Grantor generally acts as both the settlor and trustee during their lifetime. However, after they pass, the Successor Trustee will assume control and responsibility in distributing the trust assets. In an irrevocable trust, the trustee is generally not the Grantor and is responsible for managing trust assets throughout the lifetime of the Grantor and distribute the trust assets after the Grantor passes.
A Trustee is legally obligated to properly administer the trust in the best interests of the Grantor and in line with the trust provisions without acting for their own personal benefit, this is known as the fiduciary obligation of the Trustee. A trust should be carefully drafted to outline the duties and responsibilities of the Trustee and the wishes of the Grantor.
After a Grantor Has Passed
When the Grantor has passed away, the Trustee is responsible for distributing the property in line with the Grantor wishes outlined in the trust. While a Trustee is settling and distributing trust assets, they are responsible for administering and protecting the trust from unnecessary loss. There are various other duties a Trustee has, including the following:
- Gather certified copies of the Grantor’s death certificate
- Submit copies of the Declaration of Trust to named beneficiaries
- Inform the Grantor’s loved ones and family about your role as the Trustee and your responsibilities
- Collect information about the trust’s property
- Take the necessary precautions to protect and secure the trust’s property
- If the trust contains bank accounts, notify all applicable banks for access
- Coordinate with the Executor of the Grantor’s Will to pay any outstanding taxes or debts
- Administer the sale of real property owned by the trust, if necessary
- Appropriately distribute the Grantor’s trust property to the beneficiaries specified in the Declaration of Trust
When the Grantor has passed away, there are significant responsibilities a Trustee must navigate. Speak with your trust and estates attorney about your unique situation for more specific legal guidance.
Grantor Is Incapacitated
If the Grantor is still living but in an incapacitated state, the Declaration of Trust may appoint a Successor Trustee to use the trust property to fund the Grantor’s care and comfort as well as provide for the Grantor’s family and loved ones. The Successor Trustee’s duties when the Grantor is incapacitated but still living typically include:
- Informing the Grantor’s family and loved ones about your role and duties as the Successor Trustee
- Gather information about the trust’s property
- Take the necessary precautions to protect and secure the trust’s property
- Notify and receive access from banks and financial institutions with accounts placed in the trust
- Communicate with Financial or Healthcare Powers of Attorney agents to pay outstanding bills and taxes, conduct the Grantor’s business, and ensure the Grantor receives proper care
- Store all receipts, records, and invoices paid or incurred while acting as the Successor Trustee
- Providing an accounting to the Grantor and/or beneficiaries upon request
A Trustee holds a considerable amount of responsibility. Navigating their duties without an experienced trust and estates attorney may be extremely risky. Before undertaking this role, speak with your attorney to ensure you are navigating your role as a Trustee in line with the terms of the trust.
Contact a New York Trust and Estates Attorney at Fratello Law Today
Feeling anxious about accurately following the legal responsibilities as a Trustee is normal. However, our compassionate team at Fratello Law can relieve some of the burden placed on your shoulders by offering experienced legal guidance. We have over 120 years of combined experience acting as a community-based law firm. We take pride in guiding and protecting those within our community by treating our clients like family, we build relationships on trust and understanding.
Our firm is small with a big heart, and we offer potential clients a no-cost consultation. Call (631) 406-5580 or fill out our contact form to speak with a team member today.