What Mistakes Should Trustees Avoid?


Being appointed as a trustee is often viewed as an honor as it indicates a loved one has confidence in your judgment and capabilities. A trustee takes legal ownership of the assets held by a trust and assumes the fiduciary responsibility for managing those assets for beneficiaries. Serving as a trustee can be a time-consuming task that carries significant responsibilities. Unfortunately, many people don’t wholly understand the duties of a trustee, which results in serious mistakes that jeopardize a decedent’s wishes. These mistakes can stir conflict between family members and loss of trust assets. When you become a trustee, you take on severe obligations and personal severe liability. As such, it’s crucial to know the common mistakes to avoid. If you have been appointed a trustee, it’s in your best interest to enlist the help of a proficient ​​Montgomery County Trust Attorney who can help guide you during these confusing times. 

What Common Mistakes Should Trustees Avoid When Administering a Trust?

A trustee is legally responsible for administering the trust according to the trust document’s terms. Trustees must act in the best interests of current and future trust beneficiaries. If they breach their duty, they can be held personally liable. As mentioned above, trustees have a fiduciary duty to act reasonably and competently in all trust administration matters.

One of the most significant mistakes trustees make is breaching their duty. Many individuals assume their role involves acting in the best interest of the person who set up the trust. However, this is not the case. The trustee is responsible for acting in the interests of the trust’s beneficiaries. If they fail to carry out their fiduciary role and the estate loses assets, they may be legally liable for failures to protect the beneficiaries from those losses.

For various reasons, people often appoint family members as trustees. In their role as trustee, it can be challenging to remain neutral and look out for the interests of the trust when they don’t align with their interests. This can be incredibly challenging when an individual is a beneficiary and a trustee. In addition, many trustees make the mistake of not keeping good records. Accurate record-keeping helps decrease the chance of a decision by the trustee being contested. You must share accounting details with beneficiaries at specific points in your state administration. Faulty record-keeping may result in claims you breached your duty and lost trust assets.

If you have been appointed trustee of a trust, please don’t hesitate to contact a knowledgeable attorney from the legal team at JD Katz, who can help you understand your responsibilities.