Reprinted from Family Wealth: Keeping It in the Family by James E. Hughes, Jr.
Each trustee has an obligation to become educated on the duties of a trustee, as well as on the duties of the trust beneficiaries. Listed below are specific responsibilities of trustees which complement the Administration, Investment and Distribution duties governed by law and the terms of the trust agreement.
- To be fully aware of the grantor’s original purposes in creating the trust, and the current purposes of the trust if these have changed over time.
- To guide his or her decisions by these purposes.
- To act so that the actual operation of the trust is empowering to the beneficiaries within the provisions of the trust.
- To put mechanisms in place to increase the level of financial awareness of the beneficiaries, to act to see that such financial education of the beneficiaries is carried out effectively.
- To meet at least annually with each beneficiary in order to renew the beneficiary’s understanding of the trust, as well as to obtain from each beneficiary full information, financial and otherwise, about his or her specific personal situation.
- To evaluate and advise each beneficiary on how well he or she is meeting the Roles and Responsibilities of a beneficiary.
- To educate himself or herself about all beneficiary responsibilities.
- To implement effectively the trust’s general policies and procedures as they relate to:
- the trust’s investment goals and acceptable risks
- the selection and/or provision of investment advice and management to accomplish such investment goals within the given tasks
- the trust’s tax position and the selection of tax service, and
- the trust’s legal position and the selection of legal services.