A trustee is a person responsible for administering trusts or bankruptcies. A trustee must show a duty of care to the beneficiaries of a trust and failure to do so can result in their removal.
What you need to know
A trustee is a particular person or board member who has been given the legal ability and responsibility to administer property and other assets according to the terms of a trust.
A trustee has a fiduciary and legally binding duty to follow the terms of a trust.
A trustee is usually appointed by the trustor before the trustor passes.
Almost any individual can qualify to serve as a trustee. A trustee must be a legal adult and possess full mental capacity, and it is up to the creator of the trust to choose who will serve in the role. In a revocable living trust, the person who creates the trust will serve as the trustee. In marital trusts, two spouses may serve as co-trustees over the trust account. The creator of the trust can also choose a financial institution like a bank or brokerage firm to serve as the trustee.
Trustees are held to a fiduciary duty when they administer a trust. This means that the trustee owes a duty of loyalty to the trust and must act in the the trust's best interests. A trustee may not show favoritism to one beneficiary over another, and the trustee may not invest the trust assets in a way that benefits one party unfairly.
Trustees have certain responsibilities in administering trusts. First, a trustee must keep detailed records of the trust's finances. Second, a trustee must manage the investments of the assets in the trust or hire a third party to help manage the investments. Third, a trustee must oversee the payments to beneficiaries.
In a living revocable trust, the creator of the trust will often name themselves as the trustee and will also usually name a successor trustee. The successor trustee will begin serving if the original trustee passes away or is incapacitated and can no longer serve as trustee.
What to do when a loved one dies
When people die, they leave behind a life that must be closed out. Don't tackle it all alone. From planning the funeral to tackling the legal & financial estate, here's an ultimate checklist of all the things an executor needs to do following the loss of a loved one.
Learn moreJohn and Nancy create a marital trust and name themselves as co-trustees. They name their four children as equal beneficiaries of the trust, and as time passes the trust begins making annual distributions to each beneficiary. Although John and Nancy love their children, they don't believe it would be wise to name any of their children as the successor trustee. John and Nancy choose to name XYZ Bank as the successor trustee of the trust. Once John and Nancy are unable to serve as co-trustees, XYZ Bank will take over the managerial duties of serving as trustee.
In collaboration with
Aaron Schnoor
Aaron Schnoor is an Assistant Vice President and Trust Officer at Wells Fargo Wealth Management.
Aaron received his undergraduate degree in Trust and Wealth Management from Campbell University in North Carolina, along with a minor in Financial Planning. Aaron continued his education with an MBA in Financial Services, also from Campbell University.
Aaron frequently writes as an industry expert on fiduciary topics related to trusts, estate settlement and generational wealth management. His work has appeared in The New York Times, Forbes, the Trust Education Foundation and many other publications.
In collaboration with
This could be you
Atticus values the expertise and professional experience of our partners and community of contributors. And we appreciate that's what makes the fiduciary industry so uniquely special.
After all, being a fiduciary isn't something that's just learned— it's a mindset that's demonstrated, tested and enduringly earned.
That's why Atticus is built around a community of passionate executors, attorneys, wealth advisors, probate clerks and other professional fiduciaries.
🤔 Who else are we missing? You!
Join our mission to support families through some of life's most difficult events as we foster financial literacy for fiduciary topics like probate, estate planning, estate administration & inheritance.
Everyone leaves a legacy... together, let's make the process easier.
