how a trustee works
a trustee is any person or organization that holds the legal title of an asset or group of assets for another person called the grantor a trustee is granted this legal title through a trust in which the they hold title to the assets held in trust for the benefit of others the people or entities who benefit from the trust are called beneficiaries a trust is a legal entity in which a person or party who owns assets also called a trustor gives another party the trustee title to those assets or property for the benefit of a third party for example a trust might be created to provide legal protection for the trustor s assets and ensure they are appropriately distributed the trustee is charged with ensuring that the trustor s wishes are fulfilled a trustee is thus responsible for properly managing all property and other assets placed in the trust for the beneficiaries a trustee s specific duties are unique to the trust agreement and are dictated by the type of assets held in the trust for instance if a trust holds various rental properties intended to be used for income it will be the trustee s duty to ensure those those properties are managed maintained occupied and generating income trustees are also required to financially manage and oversee accounts within a trust when it is made up of other investments such as equities in a brokerage account trustees have a fiduciary duty to the trust s beneficiaries which means they are required to put aside personal interests beliefs and biases to do what s best for the trust responsibilities of a trusteeall trustees have general guidelines and responsibilities regardless of the specifics in the trust agreement trustees generally assume the following duties types of trusteesif you are selecting a trustee you can choose someone you know it might be best however to find someone with experience a trustee should understand the trust being set up and know what their responsibilities are for example if the trust includes growing assets for your family s future generations you d want to appoint someone who understands how to grow wealth there are generally three types of trustees trustee vs executora trustee administers and manages a trust fund an executor manages and administers the estate of someone who has died and left assets to heirs through a will an individual can name one person for each role or could appoint one to perform both roles like a trustee an executor can be a trust company a bank or a trusted friend or family member the executor must distribute assets in accordance with the will left by the deceased trustees and executors must both follow the laws in their state when performing their duties who to choose as a trusteechoosing a trustee might be one of the most challenging tasks when creating a trust it s tough to know which person or entity you can trust to administer your assets the way you want them to here are some considerations for choosing a trustee a wealth management and trust company has finance professionals attorneys and accountants and will administer a trust to the letter your trust can be set up to pay any fees they may charge but you ll be able to rest knowing your assets are in the hands of someone who will act in the trust s best interests you can choose a trusted friend or family member but you ll need to ensure they are up to the task of administering your trust additionally they ll need an iron will to withstand the drama and resentment that can arise when a family member is in charge of large sums of money and won t give any out on demand this person must also be willing and able to continue the task as long as the trust exists lastly you ll need to consider and appoint an alternate in case something happens to the primary trustee this ensures your trust is administered by someone you choose rather than having the courts choose for you a trust attorney can also be an excellent choice they ll be familiar with trust laws in your state and be a reliable trustee however if one of your intentions as the grantor is to grow wealth within the trust a lawyer may not be an investment professional or understand how to manage wealth 