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Were You Asked to Serve as Trustee? Here’s What You Should Know

If a friend or loved one has chosen you to act as trustee over their estate, think twice before saying yes. You might consider the invitation an honor, but it’s one that comes with significant obligations. Failing to appreciate these trustee responsibilities can lead to legal problems for you and others if you can’t fulfill them.

Four Key Trustee Duties to Keep in Mind

Trusts in California are as varied and diverse as the people who create them. No matter what the trust looks like, your trustee responsibilities boil down to four key duties.

Demonstrating Loyalty to the Trust

First, as a trustee, you must put the trust’s best interests above your own — you aren’t permitted to put the trust at a disadvantage to improve your personal standing. In any situation where your interests and those of the trust come into conflict, the trust’s interests will trump yours.

One common scenario where this dynamic comes into play is where a trustee has the opportunity to sell a trust asset. Rather than selling it for fair market value, the trustee offers it to one of their family members at a discount. Such actions violate the trustee’s duty of loyalty to the trust.

Exercising Reasonable Judgment and Care

Another one of your main trustee duties is to perform all required tasks in a reasonably careful manner.

You don’t have to know everything there is to know about trusts or never make any mistakes, but you shouldn’t rush into decisions without giving them due consideration. If you think a reasonable person would consult with an expert, such as an accountant, before taking action, so should you.

It can be helpful to retain the services of a trust attorney for as long as you remain a trustee. Your lawyer can advise you on when you should consult others and recommend reasonable courses of action for you to take.

This duty also requires you to make reasonable efforts to safeguard the trust’s property. Failing to insure vehicles or keep real property in good repair can be considered a dereliction of your trustee responsibilities. If property is damaged or destroyed, you could be held responsible for losses that could have been avoided.

Avoiding Unnecessary Delays

Depending on the size and complexity of the trust, you may need to perform any number of actions to fulfill its objectives.

While being a trustee isn’t your full-time job, neither is it a role where you can act only when it’s convenient for you to do so. Filing tax statements, selling property, and distributing assets are all time-sensitive tasks, and you can face legal repercussions if you put them off for too long.

Keeping the Beneficiaries Informed

A trust exists to benefit other people or entities. These beneficiaries have a legal right to know how you’re administering the trust.

As such, there could be legal repercussions if you fail to make reasonable and periodic disclosures to them about the trust’s health and assets. You could also face liability if the disclosures you make are fraudulent or don’t accurately reflect the true state of the trust.

Turn to a Trust Attorney From OC Wills and Trusts

Whether you’re looking to create a trust or you’ve recently accepted a role as trustee over someone else’s estate, OC Wills and Trusts in Orange County has your back. Our experienced professionals are ready to help you overcome the challenges you’re facing and answer whatever questions you might have.

Contact us today to schedule a consultation with our knowledgeable team and learn more about how we can help you with your situation.

Brian Chew, the managing partner of OC Wills & Trust Attorneys, has extensive experience in the areas of estate planning, asset protection planning, business succession planning, long-term care planning, and veterans’ benefits. By devoting his practice to estate planning matters, he has founded a firm that strives to provide exceptional service to their clients by working closely with individuals and their families to create comprehensive and customized estate plans. For the past twenty five years, Brian has served thousands of clients in the matters of estate planning, wills and trusts. If you have any questions about this article, you can reach Brian Chew here.