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The trustee’s job: Managing assets for beneficiaries

On Behalf of | Jan 12, 2023 | Concord Probate & Estate Administration Law Blog |

A California trustee manages assets for the benefit of others, known as beneficiaries. This role differs from an executor, who manages and distributes a deceased person’s assets to fulfill their final wishes.

The individual who establishes a trust, called the grantor or settlor, usually appoints the trustee. Trustees typically work with the trust for an extended period, and a set of fiduciary duties binds them to act in the best interests of the beneficiaries.

A trustee’s duties can vary depending on state laws and the assets held in the trust. Some of the typical duties performed by trustees include the following activities.

Managing and investing assets

The trustee must work to maximize the value of the trust’s assets through managing and investing activities as part of estate planning.

The trustee will also manage assets to ensure the portfolio is well-diversified. Activities can include buying and selling stocks, bonds, real estate and other assets. Regardless of the investment decisions made, the trustee must always act in the best interests of the beneficiaries.

Carrying out the role of a trustee to benefit the beneficiaries is a legal obligation. The trustee could be personally liable if they make decisions based on other criteria.

Maintaining accurate records

The trustee must keep accurate records of every transaction and investment for the trust’s estate assets. They must also provide regular reports, such as a monthly statement, to give beneficiaries an accounting of the trust’s assets, changes, distributions and other activities. The trustee may also need to ensure that the trust’s annual tax return is prepared and filed.

Making distributions from the trust

The trustee is responsible for making distributions to beneficiaries according to the terms of the trust agreement. They must use prudent and sound judgment when deciding how much income and principal should be distributed and when.

If you are concerned about estate planning and wish to set up a trust, it is your responsibility to select a capable trustee. Doing so helps ensure that assets held in trust are managed appropriately.