Trustee Responsibilities
Key Points
A trustee has a fiduciary duty to act in the best interests of the trust beneficiaries.
Trustees must follow the trust document and applicable law.
Good recordkeeping, communication, and prudent management are essential.
A trustee may have authority, but that authority is not unlimited.
Serving as trustee is an important legal responsibility, not merely an honorary title.
Introduction
Choosing a trustee is one of the most important decisions in creating a trust. The trustee is responsible for carrying out the grantor's written instructions and owes important legal duties to the beneficiaries. Selecting someone with integrity, sound judgment, and the willingness to serve is often just as important as the terms of the trust itself.
What Is a Trustee?
A trustee is the individual or institution responsible for holding, managing, and distributing trust assets according to the trust agreement. The trustee must act in accordance with both the trust's terms and applicable law.
Fiduciary Duties
Trustees generally owe fiduciary duties of loyalty, prudence, impartiality, and good faith. They must avoid conflicts of interest, manage trust assets responsibly, maintain accurate records, and provide information when required.
Common Responsibilities
Depending on the trust, responsibilities may include safeguarding assets, investing trust property, paying expenses and taxes, maintaining real estate, making distributions to beneficiaries, keeping accounting records, and working with attorneys, accountants, and financial advisors.
Who Should Serve as Trustee?
The best trustee is not necessarily the oldest child or closest relative. The role requires honesty, organizational ability, sound judgment, and the willingness to devote the necessary time and attention to the responsibilities involved.
Can a Trustee Be Paid?
Many trustees are entitled to reasonable compensation under the trust document or applicable law, although family members sometimes choose to waive compensation.
Common Misconceptions
The trustee can do whatever they think is best.
No. A trustee must follow the instructions contained in the trust agreement and comply with applicable law. Personal preferences cannot override the grantor's written directions.
Being trustee means I own the trust property.
Generally, no. The trustee manages and controls trust property on behalf of the beneficiaries but does not own those assets for personal use simply because they serve as trustee.
Trustees are never personally liable.
No. Trustees who fail to fulfill their fiduciary duties or improperly manage trust assets may be personally liable in certain circumstances.
Frequently Asked Questions
Can one person serve as both trustee and beneficiary?
Yes. This commonly occurs in revocable living trusts during the grantor's lifetime, where the grantor often serves as trustee and remains the primary beneficiary.
Can there be more than one trustee?
Yes. Some trusts appoint co-trustees to serve together. While this can provide shared decision-making, it also requires cooperation and may make administration more complex.
Can a trustee resign?
Usually, yes. The trust agreement and applicable law typically provide procedures for a trustee to resign and for a successor trustee to take over.
What happens if a trustee cannot continue serving?
Most trusts plan for this situation. The trust agreement usually names one or more successor trustees who step into the role if the original trustee dies, resigns, becomes incapacitated, or is otherwise unable to serve.
Your Next Step
Choosing the right trustee is only part of the planning process. Equally important is deciding who will take over if your original trustee can no longer serve. A well-drafted trust should anticipate that possibility and provide a smooth transition without court involvement whenever possible.
In the next article, you'll learn about successor trustees—when they begin serving, what authority they have, and how they help ensure your trust continues to operate during incapacity and after death.
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Article 7 — Trustee Responsibilities
About Jarrod Barron Law
Jarrod Barron Law helps Michigan individuals, families, and business owners make informed legal decisions through thoughtful, plain-English estate planning.
Disclaimer
This article is provided for general educational purposes only. It is not legal advice and does not create an attorney-client relationship.