Texas estate plans often include trusts with an individual named specifically for administering the contents. Managing a trust requires significant time and commitment, and a trustee has a broad range of fiduciary responsibilities. If a loved one appointed you as trustee and the beneficiaries disagree with your management, they could file a lawsuit alleging you breached your duties.
According to Fidelity, a trustee is responsible for handling tax filings and handling all assets in a trust, including distributing the contents per the trust requirements.
Performing the duties of a trustee
Acting in the best interest of the trust is your legal obligation as a trustee. As a fiduciary, the law holds your behavior to high standards. Specific duties can include the following:
- Understanding the terms of the trust and identifying the beneficiaries
- Making decisions that arise according to the trust provisions
- Communicating with beneficiaries regularly
- Answering any questions the beneficiaries have regarding the terms of the trust
Depending on the situation, you may be responsible for investing the trust assets, ensuring their preservation for future beneficiaries.
Protecting yourself as a trustee
If the trust provisions are ambiguous or if any of the beneficiaries have issues with your administration of the trust, they may bring allegations of fiduciary breach of duty. Any action construed as inappropriate may result in litigation. If anything goes wrong with the trust contents, the law holds the trustee responsible.
Documenting your actions and ensuring that they are in accordance with the trust provisions is the first step in protecting yourself from legal proceedings. In some cases, disputes arise from miscommunication. Providing documents in writing and discussing the issues in person might help resolve the problems. If investing the assets is part of your duties, getting professional advice can indicate that you handled your fiduciary responsibilities in good faith. Every trust is unique, and the best trust management methods often depend on the specific provisions and trustor’s intent.