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What are the duties of a trustee?

Estate planning can feel like another language. Probate can feel like another language.

Probate is the legal method of settling affairs after death. If somebody dies with a will or trust in place (estate plans), then their appointed executor or trustee will oversee what happens next. If there is no estate plan, Texas probate courts will distribute assets based on relationship.

Trusts are a popular estate plan because they are versatile for many different issues. People can leave income to their loved ones, they can share property and they can control how and when it is distributed. In very basic terms, the trust inherits property from the deceased and shares it with beneficiaries. The trustee oversees the trust.

Managing a trust

As the American Bar Association describes it, a trust “distinguishes between income and principal.” That means the trust pays income (money still being earned from property) to beneficiaries. It also owns principal (property with market value). A beneficiary may inherit income, property or both. A trustee can also be a beneficiary.

The trustee’s role is management. After a death, the trustee needs to gather any assets in the trust, including settling tax returns and debts. After collecting assets, they will be distributed according to the trust.

A trust’s holdings will be in an investment account, separate from private accounts. Most people don’t have experience with specialized financial accounts, and it’s common to seek help from a financial professional to make sure that assets are managed wisely.

Acting on behalf of the deceased

A trustee is acting on behalf of the deceased creator of the trust. This means you’re obligated to follow their instructions and to act ethically within the law. Most trustees carry out the wishes of their loved ones, but if a trustee is unethical, he or she can be removed from their role and even sued for mismanagement. The role of trustee is serious and it requires work, and many trustees receive payment for their time, paid out of the trust itself.

Every estate and every trust is different, protecting unique property and sharing with families as wealth moves from one generation to the next. A skilled estate planning law firm will not only help you establish inheritance for loved ones, but also the best way to manage those assets for all of the different personalities involved.

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