About Trust Administration
The Importance of Trust Administration in Estate Planning
One of the crucial components of incorporating a trust in your estate planning is trust administration. A
trust is a legal entity that is created by a document which will name a trustee who will oversee the trust. The trustee will be responsible for ensuring the safety of the funds you intend to leave to your family after you pass away, as well as for carrying out your instructions regarding the schedule and amount of payments to the beneficiaries.
If you are the trustee, you are expected to take actions to promote the best interests of the fund and the beneficiaries, and you may at times find yourself in need of legal advice concerning your responsibilities. A lawyer who has experience with this area of law can guide you in such matters as paying taxes and avoiding penalties, investing to safeguard the assets of the fund, and what actions you must take to follow the instructions contained in the trust document. It is crucial that you execute the stated intentions of the settlor and live up to your responsibilities, because otherwise you expose yourself to the liability of a lawsuit.
What are the responsibilities of a trustee?
First of all, the trustee is supposed to be on the side of the beneficiaries. They cannot show partiality to any of the beneficiaries even if they themselves were named in the will. They are not only supposed to keep the money safe until it is divided among the beneficiaries, but it is also part of their duty to manage the money, invest it, and help it to be as productive as possible. However, this does not give them the leave to invest the money in risky schemes. They are required to exercise caution regarding how they use the money that is in their care.