Trustee: Definition & Responsibilities

What Is A Trustee?

A trustee is a legal term that refers to a person who holds property or assets in trust for another person or organization. The trustee is responsible for managing the property or assets according to the terms of the trust agreement. For example, a will can appoint a trustee, the court, or a trusted company.

The role of the trustee is to protect and grow the assets held in the trust. The trustee must act in the best interests of the trust’s beneficiaries and keep accurate records of all transactions. The trustee may also be required to file annual reports with the court or the trust company.

If you are a trustee, you must understand your responsibilities and seek legal advice if you have any questions.

Trustee Responsibilities

Protecting and growing the assets held in trust

Therefore, the trustee must ensure that the assets are safe and generate a return on investment. The trustee must also keep accurate records of all transactions and may be required to file annual reports with the court or with the trust company.

Acting in the best interests of the beneficiaries

A beneficiary is a person or organization designated to receive a trust’s benefits. The trust owner can name the beneficiaries in the trust agreement, or the court may determine them.

The trustee must act in the best interests of the beneficiaries and must keep them informed about the trust. The trustee must also work with honesty and integrity and always comply with the terms of the trust agreement.

When acting as a trustee, it is essential always to keep the best interests of the beneficiaries in mind. This responsibility includes making decisions in their best financial interest, protecting their rights, and keeping them informed about the trust. The trustee must also act with honesty and integrity and always comply with the terms of the trust agreement.

Keeping accurate records of transactions

This responsibility includes recording each transaction’s date, amount, and purpose. It is also essential to keep track of the assets held in trust and any changes to those assets. The trustee should also maintain a list of all beneficiaries and their contact information.

Filing annual reports

Most trustees must file annual reports with the court or the trust company. The information should include a summary of the trust’s activities during the year, including the income and expenses generated by the trust. The trustee should also provide a list of all beneficiaries and their contact information.

Seeking legal advice

If you are a trustee, you must seek legal advice if you have any questions. Trustees can speak with an attorney to clarify their duties and responsibilities. An attorney can also help trustees to avoid any potential legal problems.

Executor vs. Trustee

The role of an executor is to administer a person’s estate after they die. This role includes collecting and managing the estate assets, paying debts and taxes, and distributing the assets to the beneficiaries. The executor is appointed by the will of the deceased person and must act by their wishes.

The role of a trustee is to protect and grow the assets held in trust for another person or organization. The trustee is responsible for making decisions that are in the best interests of the beneficiaries and must always comply with the terms of the trust agreement. A will, the court, or a trusted company will appoint a trustee. 

Next Steps

Trustees will also require financial advice and guidance to achieve the best results out of their trusts. Find out more about trusts and their benefits with our charitable trust calculator. Or learn more definitions today!

About Valur

We built a platform to give everyone access to the tax and wealth-building tools of the ultra-rich like Mark Zuckerberg and Phil Knight. We make it simple and seamless for our customers to take advantage of these hard-to-access tax-advantaged structures so you can build your wealth more efficiently at less than half the cost of competitors. From picking the best strategy to taking care of all the setup and ongoing overhead, we make it easy and have helped create more than $500m in wealth for our customers.