The Law Office of Carey Thompson, PC regularly helps clients navigate the complicated trust administration process in Texas. A trustee has a number of important duties which generally are set out in the trust document or established by state law. If you have been designated as a trustee, you need the informed representation we provide on trustees’ duties.
Being named a trustee gives you the opportunity to provide an important service to the beneficiaries; however, you can be held liable for mistakes and/or misconduct. When you become our client, we will help you understand and carry out your trustees duties. Please contact our office today to set up a free consultation.
What Is A Trustee?
A trustee is a person or entity designated to manage the assets of a trust for the benefit of the beneficiaries according to the terms of the trust. In order to carry out his or her duties, a trustee must know and adhere to the terms of the trust.
What Are Trustees’ Duties in Texas?
Generally, a trustee owes a number of duties to the beneficiaries, including:
- Duty of loyalty — A trustee has a fiduciary duty to act in the best interests of the beneficiaries and cannot place his or her interest ahead of theirs. While a trustee is not permitted to profit from the role, he or she may be entitled to a fee for administering the trust.
- Duty of competency — A trustee must be able to manage the trust efficiently. To do so, he or she must understand the terms of the trust, the assets and liabilities, as well as the circumstances of the beneficiaries. Any decisions by the trustee must take into account the terms of the trust and the interests of the beneficiaries.
- Duty to act personally — A trustee must be personally involved in decision-making concerning the trust, however, it is permissible to engage advisers, such as lawyers and financial professionals. In some cases, the trust may permit the trustee to delegate powers via power of attorney (e.g appointing an agent to sell property).
- Duty to consider the beneficiaries — A trustee must make prudent investment decisions that consider the interests of both current and future beneficiaries.
- Duty to account — A trustee must maintain a record of all income to, distributions from, and expenditures by the trust and provide annual accounting so beneficiaries are fully informed.
In short, a trustee must adhere to the highest ethical standards, act in the best interests of the beneficiaries, and preserve the value of the trust assets.
How The Law Office of Carey Thompson, PC Can Help with Trustees’ Duties
If you have been appointed as a trustee, our legal team will carefully review the trust document with you and help you understand and carry out your important duties, such as:
- Notifying beneficiaries of the trustmaker’s (grantor’s) death
- Inventorying the trust property
- Appraising the trust assets
- Transferring property into the trust
- Obtaining tax ID numbers
- Filing estate tax returns
- Preparing trust accountings
- Distributing trust assets to the beneficiaries
Ultimately, the complexity of administering a trust depends on factors such as the value of the trust assets and the method for distributing principal and income. As an example, income can be distributed to one beneficiary initially, while the principal is subsequently distributed to another beneficiary.
In short, as a fiduciary, you are placed in a position of trust relative to the beneficiaries, which means you must be capable and dependable. Given the complexities involved in administering a trust, it takes a skilled trusts and estates attorney to protect your interests.
The Law Office of Carey Thompson, PC, can help you navigate the trust administration process in Texas. When you consult us, we can help you avoid the pitfalls that may result in disputes that rise to the level of estate litigation. Above all, we will provide you with trustworthy advice and guidance so that you can faithfully carry out your duties as a trustee.
What Exactly Is A Trust Accounting?
Trustees are required to provide annual trust accountings to beneficiaries who receive distributions of income and principal during the accounting period. Information that must be disclosed in a trust accounting includes:
- Assets and liabilities
- Disbursements of principal and income
- Compensation paid to the trustee
- Agents retained by the trustee (e.g. lawyers, accountants, financial advisors)
In sum, a trustee must maintain thorough records and disclose any actions that have been taken through an accounting. Given the exacting legal requirements of preparing trust accountings in Texas, it is crucial to consult with an experienced trusts and estates attorney.
Contact our Experienced Texas Trust Administration Lawyers
The Law Office of Carey Thompson, PC is here to provide you with trustworthy advice and help you avoid the potential liabilities of administering a trust. In the event of a trust-related dispute, we will work to protect your interests, inside and outside of the courtroom. If you have questions about your trustees duties, please contact our office today to speak with our experienced trust administration lawyers.