Even the smallest trust requires a trustee who can act with competence, diligence, and in accordance with all relevant state laws. While managing a trust can be very fulfilling, you must make sure that you approach your duties as a trustee like you would any other job. Failing to do so can lead to significant consequences for you personally. Here are several common mistakes that some trustees make which you should always try to avoid.
Managing trust funds without financial advice
As a trustee you have a fiduciary duty to manage the trust funds responsibly and to do what is best for the beneficiaries. If the trust requires you to invest trust property, you should always seek reliable investment advice from a financial professional.
Acting unfairly
Trustees have a responsibility to treat each of the trust beneficiaries fairly and impartially. You must act in accordance with the terms of the trust, of course, but in all other respects you must treat each beneficiary as equals.
Making decisions without legal advice
Your duties as a trustee stem not only from the trust terms, but also from the laws of your state. Trustees must comply with all relevant trust rules, as well as any other state or federal laws which make up why. Because of this, all trustees should be able to consult with an experienced attorney whenever they make a decision or take any action involving the trust.
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