You’ve Been Named a Trustee—Now What?
Being nominated as a trustee (or successor trustee) can feel like both an honor and a heavy responsibility. If you’re unsure what comes next, you’re not alone. Understanding your role early can make the process far less intimidating—and help you avoid costly mistakes down the road.
First Things First: Do I Need to Act Right Away?
If you are named as a successor trustee, you can usually relax for now. Your role does not begin until the current trustee can no longer manage their financial affairs due to incapacity or passes away. Until then, no action is required.
If you are already serving as trustee, however, you may already have legal duties—and it’s essential that you understand them.
The Key Players in a Living Trust
Understanding who’s who will help you understand your responsibilities:
Grantor (also called settlor, trustor, or trustmaker):
The grantor is the person who created the trust. Married couples often act as co-grantors. Only the grantor(s) have the authority to amend or revoke the trust.
Trustee:
The trustee manages the assets held in the trust. Many grantors serve as their own trustee for as long as they are able. Married couples frequently act as co-trustees so that if one spouse becomes incapacitated or dies, the other can seamlessly continue managing finances—often without court involvement.
Successor Trustee:
The successor trustee steps in when the trustee can no longer serve, typically due to incapacity or death. Trusts often name multiple successor trustees in order, or sometimes appoint co-trustees (such as adult children), a corporate trustee, or a combination of both.
Beneficiaries:
Beneficiaries are the individuals or organizations who will ultimately receive the trust assets after the grantor’s death.
What Should I Know Right Now?
Ideally, the grantor will walk you through the trust and its key provisions ahead of time. As trustee or successor trustee, you should know:
Where the trust document is kept
What assets are titled to the trust
Where insurance policies and other critical documents are located
Your Responsibilities as Trustee
One of the most important things to remember is this: the trust assets are not yours. You are safeguarding them for the benefit of the grantor (if living) and the beneficiaries.
As trustee, you are legally obligated to:
Follow the instructions laid out in the trust document
Keep trust assets completely separate from your personal assets
Use trust assets only as permitted by the trust
Treat beneficiaries impartially unless the trust allows otherwise
Invest trust assets prudently, balancing reasonable growth with minimal risk
Maintain accurate records, file required tax returns, and provide accountings as required by the trust or state law
What a Trustee Actually Does
If the Grantor Becomes Incapacitated:
Oversee care and support of the ill individual
Understand and coordinate insurance benefits
Ensure care for minors or dependents
Apply for disability or other benefits
Assemble and coordinate a team of advisors
Notify banks and financial institutions
Handle necessary financial and legal transactions
Maintain detailed records and accountings
After the Grantor’s Death:
Work with an attorney to review the trust and outline next steps
Keep beneficiaries informed throughout the process
Inventory trust assets and determine their value
Pay bills, collect benefits, and file tax returns
Make interim distributions if appropriate
Complete a final accounting
Distribute assets according to the trust’s terms
Am I Entitled to Compensation?
Yes. Trustees are entitled to reasonable compensation for the work they perform. Most trust documents provide guidance on trustee fees, and state law may also apply.
Serving as a trustee can be complex, time-consuming, and emotionally challenging—especially during periods of incapacity or after a loved one’s death. Whether you have been asked to serve as a trustee and want guidance, or you are designing an estate plan and need help choosing the right trustee and structuring your trust properly, our firm is here to help.
Contact us today to schedule a consultation and learn how thoughtful planning and experienced legal counsel can make all the difference—for you and for those you care about most.
