A common question in estate planning is: What Is A Trustee? A trustee is the person or institution appointed to manage the assets in a trust, according to the instructions laid out by the person who created it (the grantor). Trustees have a fiduciary duty, which means they are legally obligated to act in the best interests of the trust’s beneficiaries.
The trustee’s job begins once the trust is created and typically continues until all the trust’s terms have been fulfilled. It is often a time-intensive and detail-oriented role. From overseeing the trust’s assets to distributing them appropriately, the trustee is responsible for ensuring the grantor’s wishes are honored.
Trustee Responsibilities
The specific duties of a trustee are outlined in the trust document, but most trusts include the following responsibilities:
- Assessing and inventorying trust property. This often includes hiring a professional appraiser.
- Trust accounting and asset protection. Trustees must keep accurate financial records and safeguard trust assets.
- Managing investments and real property. Trustees oversee financial accounts and any real estate held by the trust.
- Filing income and estate tax returns. This includes applying for federal estate tax exemptions when applicable.
- Paying debts and administrative expenses. These may include funeral costs, legal fees, and outstanding obligations.
- Distributing trust assets to beneficiaries according to the instructions set out in the trust.
- Communicating with beneficiaries throughout the administration process.
These responsibilities continue as long as the trust holds assets or requires management. While some trustees work voluntarily—especially in family trusts—others, such as professionals and corporate trustees, are paid for their services.
Types of Trustees
There are several types of trustees, each serving different functions:
- Charity trustees manage assets in a charitable trust and ensure compliance with the grantor’s philanthropic goals.
- Investment trustees handle the daily management and long-term planning of investment accounts held in trust.
- Successor trustees take over when the original trustee can no longer serve due to death or incapacity.
- Corporate trustees are companies that offer professional trust administration services, often used in complex or high-value estates.
- Bankruptcy trustees are appointed by the U.S. Bankruptcy Court to manage the estate of a person or business undergoing bankruptcy.
Despite their different contexts, all trustees share one core obligation: to administer the trust and ensure its assets are distributed as intended.
What Is a Successor Trustee?
A successor trustee is the person or institution designated to take over trust administration when the original trustee is no longer able or willing to serve—often due to incapacity or death.
Many people mistakenly believe that trust administration happens automatically, but it requires deliberate legal and financial action. According to Hudack Law’s article on Trust Administration, failing to prepare a successor trustee often results in delays, costly errors, and significant emotional stress for loved ones.
Successor trustee duties include:
- Retitling trust assets into an administrative trust using a new tax ID number.
- Filing final income and estate tax returns.
- Paying outstanding debts and expenses.
- Creating sub-trusts, such as a Survivor’s Trust and Bypass Trust in the case of a joint trust.
- Working with professionals, such as estate attorneys and CPAs.
- Communicating with beneficiaries and handling asset distribution.
These tasks are time-consuming and must be handled with precision to ensure compliance with the law and the grantor’s wishes.
Trustee vs. Successor Trustee
The trustee begins managing the trust as soon as it’s created. In the case of a revocable living trust, this is often the grantor themselves.
The successor trustee, on the other hand, assumes control only when the original trustee is no longer able to serve. At that point, the successor becomes fully responsible for continuing the trust’s administration.
While the trustee may focus on managing assets during the grantor’s life, the successor trustee often takes on more complex responsibilities, especially after the grantor’s death.
Who Makes a Good Trustee?
As Hudack Law explains in their article, “Who Makes a Good Trustee?”, it’s not enough to choose someone you personally trust. A good trustee should be:
- Financially responsible and organized.
- Able to understand or learn legal and financial concepts.
- Willing to follow the instructions of the trust—even when it’s challenging.
- Collaborative and communicative, especially if working with co-trustees or guardians.
If the trustee will be managing funds for a minor, it’s essential they work in the best interest of the child and cooperate with the appointed guardian if different individuals hold those roles.
In complex or high-conflict scenarios, a professional or corporate trustee may be a better choice. Their experience and objectivity can prevent disputes and ensure smoother administration.
Final Thought: Don’t Leave It to Chance
Whether you’re appointing a trustee or preparing to serve as one, it’s vital to fully understand the scope of the role. Trustees—particularly successor trustees—play a key role in preserving your estate and protecting your loved ones from probate, confusion, or legal conflict.
If you’ve been named as a trustee or are considering who to appoint, consulting with an estate planning attorney can help you ensure the trust is structured properly and everyone involved is prepared.
Visit Hudack Law Estate Planning Attorney to learn more. We proudly serve California, Utah, and Arizona. Call our toll-free at (877) 314-4309 to schedule your consultation with one of our experienced attorneys.