The person you appoint as trustee for your trusts looks after your assets and your beneficiaries after your death. This needs to be someone who you trust to understand the facts and make decisions in the best interest of your loved ones. The trustee has a variety of fiduciary duties to the beneficiaries and the assets they are managing on the beneficiaries’ behalf.
Trustees and Young Children
The beneficiaries of a trust are often the children or even grandchildren of the grantor. While they may be grown, they can also be minors. The trustee does not necessarily have to be the same as the person who has physical guardianship of the children and can instead be someone who is an expert at managing assets and provides some oversight to the person who is caring for the children.
The trustee can be instructed to pay out a certain amount for the children’s care and education and otherwise conserve the assets until the beneficiaries come of age and the trust can distribute the assets. In Utah, the trust can also continue past their majority and even manifest to the benefit of unborn grandchildren and future generations as well.
Fiduciary Duties
Trustees have a variety of fiduciary duties or responsibilities to manage the trust and its assets in a certain fashion. The trustee is responsible for the investment, management, and finally distribution of the trust’s assets in accordance with the guidance of the trust documents and to the benefit of the trust’s beneficiaries. The trustee has a duty of loyalty to the trust and the trust’s beneficiaries, a duty of prudence in managing the trust’s assets, and a variety of duties regarding the fairness, impartiality, and reporting on trust administration.
Decision-Making Criteria
In order to assist your trustee, you can leave behind in the trust document directions to help the trustee make decisions. Your instructions will be taken into consideration and mixed with a view of current reality and what makes the most sense as the world and the world’s situation evolves. While you may want to give the trustee guidance, you also want to leave them the freedom to make decisions that are responsive to new situations. For example, you may anticipate your trust focusing on paying for education and helping your children start their own businesses and it may need to be used for one child that has high medical needs instead.
Beneficiary Lawsuits
Sometimes, the beneficiaries are unhappy with the decisions the trustee makes. Perhaps they even believe that the trust documents or fiduciary duties have been violated. Trust litigation can be brought by any interested party to try and address the concerns about how the trust is being administered.
When making an estate plan, trusts are a useful tool to preserve and direct assets. The team at Dunn Law Firm works regularly to help individuals with a wide variety of assets, family structures, and estate goals to set up and manage trusts. To learn more, reach out to the Utah and Nevada estate planning attorneys at Dunn Law Firm by calling (435) 628-5405 to set up a free consultation today.
