Duties of a trustee

On Behalf of | May 1, 2017 | Trusts

Nevada residents who are creating an estate plan may want to include a trust as part of it. However, in choosing someone to act as trustee, they might also wonder what duties that person is expected to perform. Trustees are not expected to be a financial expert, but they are expected to manage the trust’s assets effectively. Therefore, trustees might want to hire an investment adviser.

The trustee may need to go above and beyond the investments of a deceased settlor. Heirs who feel the trust has not been managed effectively may claim that the trustee has violated his or her fiduciary duty. It is a good idea for trustees to prepare a document that explains what their investment goals are. An investment adviser might be able to assist them in understanding how to reduce various types of taxes, what assets should be sold and what the best investments might be.

As fiduciaries, trustees are also responsible for filing taxes each year. If they fail to do so by the deadline, they might be held responsible for any fees incurred. Beneficiaries who are taxable on trust income must also be given a tax statement known as a Schedule K-1.

People who are creating an estate plan might want to discuss trust planning and these responsibilities with the trustee as well as with those who will be affected by it. For example, they might want to talk to family members about the contents of the estate plan to help ensure its elements are understood. An attorney can often be helpful in these types of discussions.