Whether someone creates a living trust or leaves one behind after passing away, trustees have an important job. Managing the trust and distributing funds to beneficiaries must follow strict legal procedures. If you run into trouble, you should ask a lawyer for help.
Trustees are charged with numerous duties regarding trusts, including administration, general management, and distribution to beneficiaries. Trustees have a significant fiduciary duty, meaning they must act in the trust’s and beneficiaries’ best interests, even if that means putting their needs above their own. If beneficiaries or other interested parties believe a trustee has mismanaged a trust, they may take legal action, and the trustee needs representation.
For a free, private legal evaluation from our lawyers for trustee representation, call Flake & Flake at (702) 829-5731.
What Does a Trustee Do?
A trustee’s job is to manage the trust’s assets while following the rules the creator set. If you are unsure how to fulfill your duties or worry about a potential legal dispute, call a lawyer for help.
Managing Assets of the Trust
Managing a trust’s assets typically involves making and managing investments to grow the trust and increase its value over time. A trustee may be required to open and manage trust accounts, take regular inventory of trust assets, and make sure that taxes are filed for the trust.
Following the Rules of the Trust
The person who creates the trust must set rules for how the trust is managed and how distributions may be made. For example, the rules might explain when the trust should make gifts to family members, or what kinds of expenses beneficiaries may pay for using the trust.
For example, a special needs trust is designed to help beneficiaries with disabilities who may live on government assistance and cannot work. The trust may pay only for expenses not covered by government assistance programs, like education, therapy, and travel.
General Administration
A trustee is required to conduct general administration of the trust. This includes, but is not limited to, record keeping, documentation, and filing taxes. While general administration may seem mundane, it can lead to serious legal issues if the trustee is unsure what to do or makes legal mistakes.
How an Attorney Can Help a Trustee with Fiduciary Duties
As a trustee, you must manage the trust for others’ benefit, not your own. This may include managing and investing assets in a way that helps the trust thrive and grow in value, even if you do not profit from your efforts.
Legal Defense
If a trustee does anything to harm the trust or knowingly allows it to decrease in value, beneficiaries may sue the trustee for breach of fiduciary duty. However, the mere fact that the trust’s value or investments are not doing well does not automatically prove a breach.
Perhaps you made investment decisions in good faith, believing your plan would pay off later. Making poor investment decisions is not necessarily a breach of fiduciary duty, and a lawyer can help you defend yourself.
Advice
Our attorneys can also advise you on decisions before there is any problem. This can prevent lawsuits and help you maintain your role as trustee without challenges.
Interpreting Responsibilities
A trustee must be able to interpret and understand the trust’s legal terms, conditions, and requirements to do their job. Unfortunately, a lot of the rules, laws, and documents surrounding a trust can be quite complicated.
If you are a non-attorney and suddenly find yourself named as a trustee, reach out to our lawyers for trustee representation, who can help you interpret the trust’s legal language so you are fully prepared to fulfill your duties.
Mediation vs. Lawsuits
Beneficiaries may take legal action against a trustee if they feel there has been a breach of fiduciary duty. If this happens, you need a lawyer right away. You may be able to resolve the issue through mediation, avoiding costly litigation. Otherwise, a lawyer can represent the trustee in court and defend them against allegations of a breach of fiduciary duty.
Trustees Making Distributions to Beneficiaries
Distributions are payments from a trust made to beneficiaries. The trustee usually handles distributions, and they must follow the trust’s rules as set by the trust’s creator. Distributions must be made when specific terms or conditions within the trust’s rules are satisfied. For example, a trust might allow for distributions once per year or once every 5 years. Perhaps the beneficiary gains access to the entire trust when they turn 18 or 21.
A trustee should speak to a lawyer if they are unsure how to make distributions or if the trust’s rules are unclear regarding when and how to make distributions.
Who Is Usually Appointed as a Trustee in Las Vegas?
Exactly who is a trustee? The person who creates the trust, known as the grantor, chooses the trustee. A trustee may be named in the grantor’s will to manage a trust after their death. In other cases, the grantor is alive, and the trustee manages the trust for them. Remember, a trustee is not necessarily a deceased person’s personal representative or the executor of their estate.
The grantor may name themselves as the trustee, which is often the case in a revocable living trust. Alternatively, the grantor may name themselves, family members, professionals (e.g., accountants, attorneys), and institutions (e.g., banks) as trustees.
Trustees Managing Complex Assets
Liquid cash is often considered a simple asset to manage. More complex assets may include real estate, business holdings, digital assets, and intellectual property, among others. Even if assets are relatively simple, the rules set by the trust’s grantor may make managing them challenging or complex.
Trusts involving complex assets or rules may be harder to manage, and fulfilling fiduciary duties may be more challenging for a trustee. An attorney can help guide a trustee through legal channels and interpret crucial documents or laws that apply to the trust.
Can Someone with No Legal or Financial Background Become a Trustee?
Yes. When someone dies, they often name friends or family members as trustees to oversee the trust they left behind. Alternatively, a trust grantor may name a trustee while still alive. Whatever the case, you do not need to be an attorney or have legal or other specialized knowledge or skills to be named as a trustee.
It is crucial to get a lawyer who can help you. They can explain what the trust is, your duties, and how to manage it in accordance with the rules the trust’s creator set.
What if a Trustee Wants to Resign as the Trustee?
If you are a trustee and want to resign from your position, you may do so, but you may need to navigate some legal procedures. You cannot be forced to remain a trustee, however, resigning is a legal process, and you need a lawyer to help you. Quitting on the spot could put the trust at risk and harm the beneficiaries’ interests. If you want to resign, speak to an attorney right away.
Contact Our Las Vegas Attorneys for Trustee Representation for Legal Help
For a free, private legal evaluation from our lawyers for trustee representation, call Flake & Flake at (702) 829-5731.
