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Updated: April 29, 2019 Ask ACE

What it means to be trustee of a family trust

By Felicia Garant of Garant Consulting
The Association for Consulting Expertise (ACE) is a nonprofit association of independent consultants who value “Success through Collaboration.”
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Q: I agreed to be named as trustee of a family member’s trust. Practically speaking, what does that mean for me?

ACE advises: By choosing you as trustee, your family member showed confidence that you will respect her wishes and take your legal responsibilities seriously. Here are some of the duties a trustee can expect when administering a trust:

Impartiality: You must treat all the beneficiaries of a trust fairly and according to the grantor’s intent. Sometimes this means standing firm in the face of family pressure.

Asset management: You need to be diligent and capable, and have enough knowledge and experience, to collect, store, maintain, invest, sell or dispose of many different types of assets, some common (e.g., bank accounts) and some unique (e.g., artwork). Know when to ask a professional expert for help.

Reporting: There are laws governing the frequency and manner of reporting to beneficiaries. The trust document may also have unique reporting requirements. Improper reporting may result in serious liability for the trust and the trustee.

Tax considerations: A trustee’s decisions may have tax consequences. You need to know when to consult with an attorney, accountant, investment or other professional.

Trust administration can be very time-consuming. There are experienced and credentialed professionals qualified to serve as trustee or as trustee’s agent who will work with you, your attorney and other members of your professional services team to perform many of the hands-on tasks required.

Finally, this article is not intended as legal advice.

Felicia Garant of Garant Consulting LLC can be contacted at www.garantconsulting.com.

If you have a question for ACE, contact Jim Milliken at jim@millikenproject.com.

The Association for Consulting Expertise (ACE) is a nonprofit association of independent consultants who value “Success through Collaboration.” The public is welcome to attend its regular meetings to share best practices and engage with industry experts. For more information go to www.consultexpertise.com.

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