What are the Trustee's Obligations and Responsibilities? Answer: First let's define some terms to make it easier for other visitors. A trustee is a person who works in a fiduciary capacity (a position of trust or confidence) to manage a trust (a legal contract set up by the person forming the trust). The trustee's job for most trusts includes investing trust assets, making sure the distribution provisions (where the money goes), of the trust is followed, tax returns are filed, etc.
The "trustor" is also called a "grantor" or "settlor". This is simply the person that set up the trust, and in most cases, but not all, is the person who transferred assets to the trust. For example, in a simple situation, a grandmother may set up a trust for her grandson and name one of her children to manage the trust. The grandmother is the trustor, the child is the trustee, and the grandson is the beneficiary. It is somewhat difficult to answer your question because it is hard to know what kind of trust you are talking about. When you indicate the trustor's wishes after death, you might be talking about a revocable living trust. However, many types of trusts with different distribution or management provisions become effective on the death of the trustor. For example, an insurance trust will often require the distribution of insurance to children or other heirs after the death of the trustor, who is typically also the insured. An insurance trust, may, however, by implication (i.e., the trustor's actual wishes) loan money to the estate to help cover the cash cost of estate taxes, etc. In general, as far as whom to notify, if you are serving as the trustee, you should consult with an attorney to find out what precisely the triggering mechanisms are that change your obligations, and what those new obligations are. These might be to simply pay taxes (and be very careful that this is done or you could have personal liability if it is a Revocable Living trust), pay bills, etc. If you are speaking about a Revocable Living Trust, the time frame really depends upon the nature of the assets involved, whether there is litigation or other claims occur, whether a tax filing is required and so on. As far as people to notify, you might wish to notify everybody named in the trust who will have a right to receive distributions. You should consult with at attorney in your State familiar with probate matters since it might also be advisable to let successor beneficiaries, and even successor trustees be informed of the trustors' death. It might even be advisable, but again, check with local counsel, to notify anyone who would receive under the trustor's will had the trustor's had his or her estate distributed pursuant to a will rather than a Revocable Living Trust. You might want to take a look at the book The Complete Book of Trusts as well as The Complete Probate Guide as these both will address in depth more of these issues. You might wish to submit a more detailed question so we can provide you with a more comprehensive answer. Caution: The above advice is extraordinarily general since the question was so general. The obligation which you have has a great significant personal liability if not properly fulfilled. The rules can differ from state to state, and the trust document itself is obviously of critical importance and might have complex provisions about which you should receive expert advice and understanding.
Subscribe to our email list to receive information on consumer webcasts and blogs, for practical legal information in simple English, delivered to your inbox. For more professional driven information, please visit Shenkman Law to subscribe.