When you create a trust, the Trustee is the person you are “trusting” to safeguard and invest the trust property, pay all the legitimate debts, expenses and taxes of the trust, and distribute the trust property according to what it says in the document that created the trust.

The role of a trustee usually differs from the role of an executor in some important ways. First, a trustee’s duties can continue for many years. For example, if the trust is for the benefit of a young child, the trust could continue until the child becomes an adult. Some trusts last for the entire life of the beneficiary or for the lives of numerous beneficiaries.

A trustee may also be called upon to exercise “discretion.” This means that if the trust document says that the trust property should be used for the “health, education, maintenance and support” of the beneficiary, it will be up to the trustee to decide what specifically constitutes “health, education, maintenance and support”.

Such decisions could be extremely difficult to make. For example, let’s say that an adult beneficiary demands that the trustee pay for a new car or pay the beneficiary’s credit card bills. The trustee will need to decide if such expenditures are a prudent use of the trust property. The trustee may have to consider many factors, such as the size of the trust fund and the beneficiary’s other income and expenses.

Sometimes these types of questions are answered by the express language of the trust document, but many times they are not. The trustee, therefore, is the one who must decide.

Excerpt from the book Estate Planning for the Savvy Client: What You Need to Know Before You Meet With Your Lawyer by Mary L. Barrow, Esq.

Copyright ©2020, 2017 by Mary L. Barrow

THIS EXCERPT IS A BRIEF SUMMARY FOR INFORMATIONAL PURPOSES ONLY AND SHOULD NOT BE USED AS A SUBSTITUTE FOR THE ADVICE OF COMPETENT LEGAL COUNSEL FROM AN ATTORNEY ADMITTED OR AUTHORIZED TO PRACTICE LAW IN YOUR JURISDICTION. YOU SHOULD ALWAYS CONSULT YOUR ATTORNEY BEFORE IMPLEMENTING OR CHANGING ANY ESTATE PLANNING STRATEGY.