What is a Trustee? 10 Important Things to Know

Choosing a trustee for your estate is no easy task, but with our helpful guide it should be a bit easier to manage. If you need help understanding what is a trustee, click here for more details.

Trust is the ultimate foundation of human relationships.

Without trust, many things go awry and end in unfortunate circumstances. One of the biggest displays of trust is choosing a trustee for your estate. Knowing what a trustee is and does is key in your decision-making process.

A trustee holds many legal responsibilities in handling assets, filing taxes, and distributing assets. With so much on their shoulders, it’s imperative you find someone who can handle the duties properly.

Below are 10 things to know when you’re asking yourself, “What is a trustee?” Make sure to keep reading to gain a full understanding.

1. Mindful of Family

When someone is appointed as a trustee, they are expected to be mindful of all loved ones, especially when distributing assets.

While every family member may not be happy with final decisions, the trustee should have consideration and care when making decisions. This is important because a family should not be divided in a time of grief and confusion.

Choosing someone with an extensive knowledge of family ties and the past is crucial. A trustee should be a trusted family member or adviser.

2. In Good Health

It’s important to constantly ask yourself, “What does a trustee do?” but if your trustee is not in good health and does not have much longer to live, the answers to that question may not serve a good purpose.

When choosing a trustee, select someone in good health. A trustee is someone who not only handles their own decisions but carries out the decisions of someone else.

Make sure the hands you are leaving your legacy in knows how to carry it out in the best way possible.

3. Smart with Taxes

One of the main points of what a trustee does is filing taxes for the trust. This is not to be confused with the executor who will file the deceased’s final taxes.

If you are aware someone in your family has struggled with filing their own taxes, they are not a good fit. Choose someone who has an understanding of financial responsibility and deadlines.

In the case your trustee is responsible but needs an extra helping hand, there are plenty of resources available for them.

The remainder of your life should be spent in enjoyment and relief so choose someone who will take care of you.

4. Organized and Up-to-Date

A major point in understanding what is a trustee is knowing a trustee is responsible for preparing all records for the IRS.

When selecting someone, make sure to look at their organizational skills, how they handle stressful situations, and if they can be trusted to keep up with all documents.

If someone has had a past of constantly losing things, letting important deals or meetings fall through, or forgetting important details, they may not be the best fit for your trustee. Again, trust and reliance are key foundation elements.

5. Effective with Communication

Trustees are responsible for upholding constant communication with beneficiaries. Choose someone who is firm yet understanding and easy to work with.

Good communication is a combination of listening and speaking, effectively dealing with unwanted situations, and retaining important information in conversation. Make sure your trustee can handle all of these things.

Communication can be improved, but there are people in life who are not naturally gifted when it comes to effective communication.

6. Takes Initiative

Your trustee oversees finding the answers they or the beneficiary might have regarding your trust.

Make sure when selecting a trustee, you choose someone who often takes the initiative and does not wait for answers to come to them. Taking initiative can be as simple as contacting tax services or reaching out to another loved one.

If someone has often appeared as lazy or timid in decision-making, they may not be a good fit for trustee. You need someone who will act when it is needed most.

7. Remains Trustworthy

Distributing the assets to beneficiaries is a huge responsibility for a trustee. Make sure you choose someone you trust distributing your legacy.

Those who are known to bend the truth, work under the table, or lose the trust of family and friends are not good fits. The trustee should be trusted by everyone around and should uphold the terms even if it leaves a few people unhappy.

8. Cares About Your Needs

A trustee is the main person confirming all terms with you to make sure everything is set in order. They should be double-checking with you all terms, beneficiaries, etc. are correct.

If someone is bad about being too independent and taking control from others, they aren’t a good fit for trustee. Despite your declining health or other circumstances, they need to know you have the final say.

Choose someone you are comfortable working closely with.

9. They Know You

A trustee should not only be responsible, organized, and caring – they should know you and your wants. Having your best interest in mind is the number one duty of a trustee.

Choose someone that understands your history, needs, and desires.

10. Rely on Your Knowledge

Using your knowledge of the past and understanding of the characteristics of the people closest to you, go with what your intuition says to do. Even if someone is the most caring person in the world, they may not be good with paperwork.

Listen to what your mind has to say and select wisely. A trustee holds your legacy in their hand so make sure you choose reliable ones.

What Is a Trustee? Answered!

If you find yourself at the end of the line and still asking, “What is a trustee?”, look no further.

Make sure to take all the above points into consideration when choosing a trustee for your estate. Your life and possessions matter so make sure it is in the hands of someone you and everyone else can trust.

If you have questions about filing taxes, finding tax forms, or just need advice, explore our blog.

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