Trusts are popular tools for effective estate planning, but are only as useful as the trustee you appoint to oversee their management. The State of Virginia outlines the authority and responsibilities of a trustee under Title 64.2 Wills, Trusts and Fiduciaries, Chapter 7 Uniform Trust Code, Article 8 Duties and Powers of a Trustee. We recommend reviewing these duties before considering anyone to function as a trustee. A brief explanation of these duties can be found in this article from Promise Law.
As you begin to understand what is required of whomever you choose for this role, consider the following factors when making your choice.
Your trustee must be able to invest the time necessary to manage the trust. There is more to this than reviewing yearly paperwork or making a few phone calls. Trustees may be called upon to spend a significant amount of time with:
- Calculating and filing estate tax returns
- Securing and valuing assets
- Selling assets, such as real estate
- Maintaining the property owned by the trust
- Holding estate sales
- Securing appraisals for estate or trust assets
- Dealing with debts and creditors
- Maintaining records of trust activity and reporting annually
- Dealing with beneficiary concerns and communications
If a potential trustee already has considerable career, family and community responsibilities, they may find it difficult to handle time-sensitive trust matters.
A primary duty of your trustee is to manage valuable assets. They are charged with securing assets, establishing their value, liquidating any assets required to cover debts and overseeing distributions to beneficiaries. Some trusts may provide specific instructions about these matters, but often, it is up to the trustee to decide which distributions are appropriate. Your trustee must be trustworthy and able to make difficult decisions impartially, without considerations of family dynamics or other relationships. Their primary responsibility is to manage the trust appropriately.
A trustee will need to have some expertise in various areas, although no one person can be expected to be well-versed in every aspect of trustee responsibilities. What expertise the trustee does not possess is typically contracted to other experts in certain disciplines, like law, taxes, real estate, accounting and others. The trustee you select must know what they know, and what they don’t know, and be willing to get the help they need according to the provisions provided in the trust.
Trustees are typically compensated for their time and work concerning the trust. If you choose a trust professional to handle your trust administration, they often charge a single bundled fee for everything. Individual trustees may not charge for their services, but they may need to contract other professionals to handle certain matters. This can add to the overall cost of the trust itself, and should be considered when creating the trust and arranging for its funding.
Virginia Trust Administration Attorneys
The Virginia Trust Administration Attorneys at Promise Law can provide valuable guidance and wisdom when setting up a trust and choosing your trustees. We can help you vet possible candidates and offer seasoned counsel to help you make the best choice in your circumstances.
Our talented team can also provide invaluable assistance for trust administrators. With years of experience, knowledge, and relationships with many area professionals, our team can help you meet your trustee responsibilities in a variety of valuable ways. Failure to properly handle trust administration can lead to conflict and potential personal liability, so securing the assistance you need early in the process is critical.
Promise Law also offers a free, educational Probate and Administration Workshop that you can view on-demand to answer important questions about probate and estate/trust administration. Contact us today to enjoy this easy-to-understand resource and schedule a consultation with one of our experienced Estate Planning / Trust Administration Attorneys in Newport News, VA.