The person who manages a Trust, the Trustee, has a legal duty to manage the Trust's assets in the best interests of the beneficiaries. This might include managing rental properties, investing funds or paying income to the beneficiary.
How much a Trustee is required to do and how much access he or she has to the funds should be specified in the Trust.
A simple or mandatory Trust requires the Trustee to distribute income to the beneficiary. A complex or discretionary Trust may afford the Trustee discretion over the principal and income to be distributed.
Trustees may and often are paid for their services because of the amount of work involved in managing a Trust and the threat of potential liability if assets are mismanaged. How much a Trustee is to be paid should always be agreed upon in advance.
When appointing a Trustee, be sure that the individual or corporate entity will agree to serve as Trustee and can and will comply with the terms of the Trust. Because there is generally such a high standard of duty and liability imposed on trustees many elect to use the services of a corporate Trustee; the chosen company should be checked out to verify its ability to perform the task in hand as well as its respectability and whether it is likely to be around in the long term.
Turner Little and its affiliates do not provide tax, legal or accounting advice. Material on this page has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.