If you have been asked to serve as a trustee, chances are you were initially flattered by the request. After all, it is quite an honor—a parent or loved one thinks highly enough of you to entrust you with managing a significant portion of their life’s savings. However, before agreeing to serve as trustee, it’s important to carefully consider the responsibilities involved. Administering a trust typically includes the following duties—and often more:
Locating and protecting trust assets
Collecting life insurance policies, annuities, and retirement accounts that name the trust as the primary beneficiary
Coordinating settlement of the estate with the personal representative if probate administration is necessary
Obtaining the values of all trust assets at the time of the trustmaker’s death, including real estate and business interests
Ascertaining and paying off all of the trustmaker’s debts from funds remaining in the estate
Assessing income and estate tax liabilities
Preparing and filing all required income and estate tax returns
Paying the ongoing expenses of administering the trust until it can be terminated and distributed to beneficiaries
Raising the cash necessary to pay off debts, ongoing expenses of administration, and estate and income taxes
Investing and managing trust assets until they can be distributed to beneficiaries
Distributing all assets left in the trust after all debts, taxes, and expenses have been paid
These tasks can be time-consuming and, in many cases, extremely complicated. The first question to ask yourself is whether you have the time and skills necessary to effectively administer the trust. Another important consideration is that a trustee can be held personally and financially responsible for failing to carry out the mandates of the trust exactly as specified. Even inadvertent mistakes can lead to severe penalties.
Given these challenges, the decision to serve as trustee should not be taken lightly. If you are unsure about accepting the role, The Lansky Law Firm can help you understand the responsibilities and risks involved. If you choose to serve, we will guide you through every step of the process. If you prefer not to accept this responsibility, we can assist you in selecting the ideal person to serve in your place.
Call us at (901) 767-7006 or visit www.lanskylawfirm.com to schedule a consultation today.
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