What does a trustee do?

On Behalf of | Apr 3, 2023 | Estate Planning

For many people putting together estate plans, trusts and trustees are important tools. Trust can help people be more specific about where assets go after they pass away, as well as potentially saving beneficiaries time or money when it comes to estate execution. In order to set up a trust, Oregon testators must designate both a trustee and at least one beneficiary.

A trustee has a wide range of powers that they may exercise in order to oversee a trust. This includes the ability to:

  • Hold and invest assets within the trust
  • Use trust property in various ways, such as pledging it as security for a loan or mortgaging it
  • Distribute and/or loan property to the beneficiaries
  • Pay expenses necessary to manage the trust, such as paying taxes andadministrative fees, hiring accountants or retaining attorneys

With such broad powers, it is clearly very important to select a trustee who is deeply trustworthy. Thankfully there are also legal protections to ensure trustees do right by testators and beneficiaries. This is known as a fiduciary duty. Fiduciary duty is a legal obligation that a trustee must act in the best interests of the beneficiaries of a trust. Additionally, they are legally bound to faithfully execute the instructions that govern the trust; so, for example, if a testator requires that money in a trust only be used for educational pursuits, a trustee is required to uphold this.

Even with the legal protection of fiduciary duty, it can be intimidating to pick a trustee. considerations such as the trustee’s experience with financial matters and their judgment overall. It can be equally intimidating to accept the role of trustee, especially for those who have not played this role before. In some cases, professionals are a good option to investigate if there is not an obvious choice for the job. In any event, there are many legal considerations that can come into play when setting up and overseeing a trust, which should be looked at carefully with the help of an Oregon estate planning attorney.