First and foremost, congratulations! If someone named you as a trustee or successor trustee, that person must have thought that you are smart, trustworthy, and organized. Being chosen as a trustee is a pretty big compliment.
But, just like Uncle Ben told Spiderman: “With great power comes great responsibility.” (I think Voltaire said it first, but that’s neither here nor there.)
Your first step as a trustee is to get your hands on the trust. The trust will give specific instructions on what your powers are, what limitations you have, and who the beneficiaries are. A well-written trust is a set of rules for what is given to whom and how.
A lot of trusts, but not all, will instruct you to liquidate and combine all assets of the person who made the trust (the “Settlor”). The super important part here is that you should keep everything in a separate bank account for the trust and absolutely do not mix trust monies in with your own personal bank accounts, even if you have a separate ledger for it. The trust assets need their own account. Sometimes, you might have to create multiple trust accounts if, for example, you have to retain part of the trust money for someone who is a minor.
If a beneficiary of the trust is over 18 years old, but the trust says that he or she cannot have the money until a later age, you have to be able to give an accounting of the trust assets within a reasonable time after that person asks for it. You might also have to give an accounting to the Settlor if you’re acting as trustee because the Settlor is incapacitated.
If you get a little (or a lot) overwhelmed by any of this, most trusts not only allow but will pay for you to get some professional help from a lawyer, accountant, or investment advisor. If you’ve been named as a trustee or successor trustee and you’re feeling a little overwhelmed right now, give us a call or set up an online appointment.