Your friend Rose has created a trust and she would like you to be her trustee. You want to help, but you’re understandably concerned about the weight of responsibility. As trustee, you’d be managing Rose’s property on her behalf and for the benefit of others she names. Your duties could include paying her bills and taxes. You might also manage bank accounts, make investments, collect rent or outstanding debts. Additionally, securing insurance if necessary and carrying out any other tasks specified in the trust are part of your responsibilities.
People named as trustees are considered in law as “fiduciaries.” “Fiduciary” stems from the Latin for “trust.” To merit that trust, you must act in Rose’s best interests and uphold the highest ethical standards of good faith and honesty.
It is a lot of responsibility, but the government is here to help. The Consumer Financial Protection Board (CFPB) has issued a guide: “Managing Someone Else’s Money: Help for Trustees Under a Revocable Trust.”
Download your free guide here:
https://www.consumerfinance.gov/consumer-tools/managing-someone-elses-money/trustee-guides/
The leaflet emphasizes the need to document everything you do. It lists your duties, provides contact information for helpful agencies, and includes advice about what to do if you fear Rose is being exploited.
There is significant work to be done as trustee. However, if you need help managing your duties, the leaflet encourages you to consult professionals like lawyers and CPAs. You can also seek assistance from a range of government agencies. Additionally, you can obtain “errors and omissions” insurance to cover you in case you make a mistake.
The person who has asked you to serve in this important role has faith in you, appreciates your ability to get along with people, and believes you can do the job. That is an honor. On the other hand, before you accept, it would be wise to go into this experience with your eyes open, to make sure you’re willing and able to accept the responsibility.
Consult the leaflet first, to familiarize yourself with what is being asked of you. If you have additional questions, we are here to help! Call us at (207)848-5600
