What Does a Trustee Actually Do (and Who Should You Choose)?

A trustee manages the assets held in a trust and carries out the instructions you included in the trust document. Depending on the type of trust, the trustee may manage property during your lifetime, step in if you become incapacitated, or distribute assets to your beneficiaries after your death.

Choosing a trustee is one of the most important decisions you will make when creating a trust. Even the best-written trust depends on someone capable of filling this important role. One of the benefits of working with a Bethlehem trust attorney is getting support in everything from drafting the documents to selecting a trustee.

What Are a Trustee’s Responsibilities?

A trustee is responsible for managing trust assets, following the terms of the trust, and acting in the best interests of the beneficiaries. These individuals have obligations of honesty, diligence, and care when it comes to the trust assets and their beneficiaries.

The exact responsibilities of a trustee depend on the type of trust and the assets in question. Some trusts hold only a home and a few bank accounts, while others contain investment portfolios with physical and digital assets that are held in locations across the country. Regardless of the size of the trust, the trustee must administer it according to the instructions you created.

Trustees cannot simply do what they believe is fair. They are bound by a specific set of guidelines, and the failure to follow them can lead to significant consequences.

When Does a Trustee Begin Acting?

A trustee’s authority depends on the type of trust and the role assigned to that trustee. In many revocable living trusts, you serve as your own trustee during your lifetime, and your successor trustee begins acting only after you become incapacitated or pass away.

If you become unable to manage your affairs because of illness or injury, your successor trustee can step in according to the terms of the trust. This transition often allows someone you trust to step into the role and act in the trust’s best interests.

After you pass away, the successor trustee will take on the task of administering your trust. Usually, this involves distributing the property to your beneficiaries according to the terms of the trust document.

Can a Family Member Serve as Trustee?

There is nothing preventing a family member from serving as your trustee. Many people choose a spouse, adult child, sibling, or other trusted relative to serve in this important position. Family members often understand your goals and know your beneficiaries better than most, making them uniquely qualified for the task.

It’s worth noting that if you anticipate family conflict, naming one beneficiary as trustee may create additional tension among the rest of the relatives. In those situations, you may want to consider a neutral third party in order to keep the peace.

Professional trustees, such as banks or trust companies, may also serve in certain cases. Although they charge fees, they bring experience, continuity, and professional administration that some larger or more complex trusts require.

What Happens If a Trustee Cannot or Will Not Serve?

If a trustee can’t keep serving, the trust usually names a new trustee who takes over administration. It’s a good idea to plan for this possibility and name a successor in your trust documents to avoid any confusion.

There are plenty of reasons why a trustee might resign, including age, illness, or other obligations. There are also times when a person realizes they simply don’t want the responsibility.

If your trust includes successor trustees, the transition often occurs smoothly. If no successor has been named or no one is available to serve, beneficiaries may need to ask a court to appoint a replacement trustee.

Trustees may also be removed if they fail to perform their duties properly. Examples include mismanaging trust assets, acting dishonestly, failing to communicate with beneficiaries, or violating the terms of the trust. In appropriate cases, beneficiaries can petition the court to remove a trustee and appoint someone else.

Frequently Asked Questions

Does a trustee get paid?

Trustees are generally entitled to compensation for the work they perform unless the trust states otherwise.

Can the trustee also be a beneficiary?

Yes, it’s common for a beneficiary to also serve as trustee, particularly in revocable living trusts.

Can more than one trustee serve at the same time?

Yes. You may appoint co-trustees to serve together.

Can beneficiaries remove a trustee?

In certain situations, yes. If a trustee breaches fiduciary duties or fails to properly administer the trust, beneficiaries may ask the courts to remove them.

How Our Firm Can Help

Selecting a trustee is not a decision you should make based solely on family relationships. We help clients evaluate potential trustees, explain the legal responsibilities involved, and structure trusts that clearly define each trustee’s authority and duties. Careful planning today can prevent misunderstandings and disputes years from now.

If you already have a trust, we can also review your trustee designations to determine whether they still reflect your wishes. Whether you need to appoint a successor trustee, replace an existing trustee, or resolve questions about trust administration, we provide practical guidance tailored to your family’s circumstances and your estate planning goals.

Contact Leeson & Co. Today

If you are creating an estate plan, now is the right time to discuss your options with an attorney. The team at Leeson & Co. can answer any questions you have and ensure that your plan fits your needs. From wills to trusts, we can create the documents that power your plan and ensure everything meets court requirements. Contact us as soon as possible for your confidential consultation with an attorney.