A trust provides the opportunity to pass on funds, real estate, and more to a beneficiary. It can be created in a variety of different situations, including as a part of a living will or as a part of an inheritance in a will.
When the trust is created, a trustee will be put in charge of it and will need to make sure it’s cared for properly. The trustee has responsibilities toward the trust to care for it on behalf of the beneficiary.
Avoid using Trust Assets
A trustee can’t use the assets held in the trust for their own benefit. If there is a house in the trust, for instance, the trustee can’t sell the house and keep the funds from the sale. If there is money in the trust, they can’t spend it in a way that’s incompatible with the trust.
If funds are misappropriated or anything goes wrong with the trust, the beneficiary may need a trust litigator to untangle the situation and work to get their money back.
Keep the Trust Separate
The trustee must keep the trust separate from their personal assets.
The assets held in the trust should be in the trust’s name, not the trustee’s, as the assets do not belong to the trustee. They belong to the trust. If real estate is put into a trust, for example, the name of the trust will be on the deed, not the trustee or beneficiary.
Funds held in the trust must be in a separate bank account, not in the same account as the trustee’s finances.
This helps with tracking the assets in the trust over time.
Invest the Trusts Carefully
Funds in a trust can be invested to help the trust grow over time. This is commonly done today.
However, it is important to manage the investments wisely.
There should be minimal risk for the funds in the trust, but as much of a return as possible. It is a good idea to work with a professional to set up the investments to make sure they’re done properly and to minimize the potential risk for the beneficiary.
Keep Records of Everything
It is imperative the trustee keep accurate records of the trust and follow all guidelines for how it is handled.
Records include tax documents, returns, any changes to the assets, and more. All of these records may be needed if there is any question about the accuracy of the trust and will need to be viewed if there are any concerns about how the trustee is handling them.
The trustee should keep the records as long as possible, so they are viewable in the event they’re needed.
A trustee must manage the trust properly to uphold the beneficiary’s rights. Today, there are several reasons why a trust may be created and who the trust can help. It is important to make sure it is done correctly and legally to prevent potential issues.
If you are named as a trustee for any trust, take the time to speak with a professional to learn more about your responsibilities, the rights of the beneficiary, and what you need to do to make sure the trust is upheld properly while it’s in your care.
They can answer any questions you may have.