A trust is a legal arrangement that allows a person to deposit assets and have them distributed at a later time according to certain predetermined instructions. A trustee is the party who oversees the trust while it holds assets. Trustees can be financial institutions, relatives, or neutral third parties. In some instances, the responsibilities and obligations of trustees are regulated by law, however, generally there are not any requirements that qualify or disqualify a person from being chosen to operate in such a capacity.
Trusts are usually established because a person has assets she wants distributed in a specific manner in the future. This type of arrangement differs from a will in several ways. One of them is that, until the time of distribution, the assets are overseen by a trustee. This individual can be thought of as a guardian of the assets. He is usually chosen by the person or group who established the trust.
Although the assets may not be in a trustee’s physical possession, it is his responsibility to maintain control over them. The trust agreement may specifically outline the requirements and limitations of the trustee. The type of assets that must be managed and distributed will also help determine what the trustee’s role is. For example, when there are bank accounts, it may be his duty to monitor balances and write checks. When there is real estate to be dealt with, the trustee may be responsible for ensuring upkeep and collecting rent if the properties are leased.
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Although trustees act as overseers, they may not perform all duties themselves. There may be some specialized duties they do not have the ability to perform, such as reading or drafting legal documents and choosing safe investments. Trustees may have the authority to choose individuals to perform these tasks and to relieve them of their duties if necessary.
A good trust agreement provides specific details for the distribution of the assets. These details may include the standards and types of services and products that are permissible. For example, a trust left by a grandmother to pay for her grandchildren’s medical needs may outline that certain facilities must be used and that certain treatments, such as abortions, are to be excluded.
Sometimes the details are not specific and the trustee may have to make decisions regarding whether or not certain actions should be taken. When a trustee makes a decision, he should always consider the original intention of the person who initiated the trust. Furthermore, his actions should always be in the best interest of the recipients.