Ten Essential Tasks for Every Trustee

So you’re the trustee, now what? Here are the ten things every trustee is responsible to do.What is a Trustee?

Merriam-Webster’s dictionary defines a trustee as “one to whom something is entrusted.”

In a legal sense, we’d define a trustee as a person or organization that has been given responsibility for managing someone else’s property or money through a trust.

What does a trustee need to do?

 1 – Invest and manage the assets. Trustees have an obligation to invest trust assets with minimal risk of loss. If an investment is too risky, any loss could be charged to the Trustee. California law is very strict about how to handle trust assets.

2 – Pay for health, education, and maintenance of minor beneficiaries, if required.

3 – File IRS Form 56 – File Form 56 once to indicate that a Personal Representative has been appointed to handle the Trust estate, and a second Form 56 to indicate that the Personal Representitve’s duties have been fulfilled.

4 – Prepare and file income tax returns for Trust and Decedent. The IRS needs to know that the Decedent will no longer be required to file tax returns. The Trustee will have to file a tax return for the Trust if there is any money earned by the Trust. Earnings include rental income, interest income, or investment income.

5 – Notify creditors by actual notice and publication. Without this notice being sent to the creditors or being published, the Trustee could be liable for claims against the estate until the statute of limitations on any claims have expired.

6 – Notify Department of Health Services.

7 – Manage Accounts. Prepare and get approval of an accounting of all assets in the Trust estate assets before distribution of any money or other assets.

8 – Distribute assets and get receipts from beneficiaries – write checks, change titles, complete transfers, etc.

9 – Terminate the trusteeship at the appropriate time.

10 – Close the Trust.

Remember, I’m NOT giving you legal advice here. This information is designed to get you started on the right track. That way you can ask the right questions and do your research to be a good Trustee. A good Trustee is one who obeys all the rules and stays out of trouble.

I’m available to answer questions or to give you a hand. Give me a call. Thanks for reading!  GQ