Serving as a trustee can be an honor and provide peace of mind that you can carry out a loved one’s wishes. However, the role also comes with solemn duties and legal obligations. As a trustee, you have a fiduciary responsibility to manage the trust assets solely for the benefit of the beneficiaries. Failure to do so opens you up to accusations of financial elder abuse or fiduciary misconduct.
There are a few things that trustees should consider to ensure fair and responsible trust management.
Follow the trust terms
The trust document outlines the settlor’s wishes for asset management and distributions. Closely adhere to all instructions and allocation percentages. Deviating from the trust terms could lead to claims of financial abuse from disgruntled beneficiaries.
Maintain detailed records
Document all trust transactions, income, expenses, distributions, investments, tax filings and other activities. Keep organized records to demonstrate you are handling the trust properly.
Avoid conflicts of interest
Do not combine trust assets with your own or handle trust matters in a way that benefits you personally. Keep trust assets and accounts completely separate.
Communicate frequently
Keep beneficiaries informed by providing regular trust accountings. Be transparent about the trust administration process and respond promptly to beneficiary inquiries.
According to a study by the National Center on Elder Abuse, approximately 1 in 10 adults over the age of 60 experienced some form of elder abuse in the past year, including financial exploitation. By honoring your fiduciary duties, you can manage the trust effectively and minimize accusations of financial impropriety.
