How a New Jersey Trust Attorney Can Help a TrusteeJanuary 18, 2021
The responsibility may seem daunting to someone who has been named a trustee for a loved one. A trustee should be someone who has the skills and ability to administer the assets in a trust. But because a trustee must also be an individual that the trustor has confidence in to carry out their wishes, that person is often a family member, an adult child, or a close family friend. Family members are not usually “professional” trustees, and yet they still must fulfill important legal duties and care for the trust’s assets.
Why Hire a New Jersey Trust Attorney?
Unfortunately, when appointing a family member trustee, the trustor may not have considered if that person has the knowledge or experience to manage extensive financial affairs, has the time to manage the trust, or can act fairly when it comes to other family members. The trustee must protect and handle the trust’s financial obligations and also relationships between the trust benefactors in a fair and cordial way.
If you have been named a trustee and want advice or assistance administering the trust, a good option may be to retain an experienced New Jersey trust attorney to assist you.
What Are the Duties of a Trustee?
The duties of a trustee will be as diverse as the trust itself, but the main duties will be to manage the assets and to administer it according to the wishes of the trustor. The most common of these duties can include:
- Understanding the terms of the trust — The trustee is required to understand the terms of the trust and administer the assets according to those terms as they were written. The trustee must ensure that assets are safely under their control, and all records are in order.
- Protecting the assets — The trustee is responsible for managing and protecting all assets in the trust, from the financial reconciliation of bank statements and investment accounts to the maintenance of real estate.
- Investment of financial assets — The trustee, as a fiduciary role, must adhere to prudent investor standards, guarding the principal of the assets primarily instead of investing for the greatest return.
- Keeping detailed records — The trustee is accountable for the assets in the trust and must keep detailed records of everything done in the administration of the trust.
- Having taxes prepared and paid — The trustee must ensure that a tax return for the trust is prepared, and the taxes are paid each year.
- Distribution of funds to the beneficiaries — The trustee must distribute the assets to beneficiaries according to the terms of the trust. Some trustees have a great amount of discretion over the distribution of assets and may have to decide when beneficiaries may or may not receive funds.
- Mediate disputes — In some cases, conflicts can arise between beneficiaries. The trustee must remain a neutral party and attempt to resolve these disputes before they escalate.
A trustee has a legal obligation to perform all these duties, and this obligation may last for a very long time. Unfortunately, most trustees are not professional accountants, asset managers, or investment bankers. And yet, these are the legal responsibilities of a trustee, regardless of their expertise. Many trustees decide to retain a professional New Jersey trust lawyer to alleviate the confusion and stress from these duties.
Hiring the Right Professionals
To successfully administer a trust, the trustee should have a command of many financial and investment concepts. Consequently, many trustees with no former experience can make mistakes in the administration of a trust.
Unfortunately, a trustee can be held personally liable for these mistakes. A good way of preventing this from happening is to retain an experienced trust attorney in New Jersey throughout the trust administration. In most cases, a trust will give the trustee the right to hire professionals to help properly administer the trust and pay reasonable fees for these professionals from the trust.
Having the assistance of an attorney can help ensure that a trustee is not making any mistakes or getting in the middle of disputes between benefactors. A New Jersey trust attorney can help a trustee make good decisions or find the right professionals for investment or tax strategies. He or she can also help provide open communication between all parties so everyone can work collaboratively.
If you have been named a trustee but want guidance and assistance to fulfill your duties, you should speak with a New Jersey trust attorney. At AJC Law, we would be happy to answer any questions you have about setting up a trust, naming a trustee, or administering an existing trust. Contact us at 201-664-0540 to schedule a complimentary consultation.