Do you ever wonder how is it to take responsibility for someone else’s money? That sounds challenging and this is what a trustee does but what is a trustee? How do they manage the money and use it in the best interest by following the terms and conditions? This article is based on all such queries, the outline includes the following:
- How to Define Trust?
- Define A Trustee and His Irresponsibilities
- The Bottom Line
How to Define Trust?
A process where the money or the assets of another person are managed in a way that ensures to make benefits is called trust. People that are involved in a trust are listed below:
A trustee is a person who will actually manage the trust activities.
A beneficiary is a person who gets the benefits from the trust.
A settlor is the one whose money is placed in the trust for further beneficial activities.
Furthermore, the responsibility of a settlor is to hunt for a trustee in order to appoint him for the trust administration purpose. Now it is the decision of the trustee to make decisions about the beneficiaries of the trust. There are certain reasons to have a trust for the beneficiary, which includes the following:
- If a beneficiary is under the age of 18 and not mature enough to handle his own affairs, the trust setup is important for the beneficiary.
- In case an older individual requires long-term care payment as a beneficiary.
- A disabled person is suffering from a permanent disability and can’t handle his personal affairs on his own
There are several types of trust and the setting-up of a trust totally depends upon the way assets need to be controlled.
Define A Trustee and His Responsibilities:
Now that you know what is trust, let’s delve into the discussion of what is a trustee? The management of money and assets in a trust ensuring the ways to provide benefits to the beneficiary is the job of a trustee. The responsibilities that a trustee must consider include the following:
- The money and assets of a trust must be used only to give benefits to the beneficiary.
- Every move you decide to make as a trustee must consider the best interest of the beneficiary. The trust agreement explains all the dos and don’ts as a trustee.
- If the agreement tells that the benefits are strict to be used for an older beneficiary and to pay for his care fees, the trustee must not do anything else with the money.
- There are no benefits for the trustee from the money of trust. However, in some agreements it is mentioned if that is the case, the trustee can follow accordingly.
Moreover, if you are unable to fulfil your responsibilities as a trustee, the consequences can be worse than you can go to court and you will have to pay for the decided penalties as well.
Do you want to know the defined outline of your responsibilities as a Trustee? Speak to one of the professionals or request a callback.
The Bottom Line:
Now that you have developed a better understanding of what is a trustee, we can sum up the discussion by saying that legal responsibility is associated with an individual working as a trustee. Every act must be according to the interest of the beneficiary. If it goes otherwise there can be serious consequences against the trustee as well as the trust.
We hope this article provides clear knowledge about the trustee and associated responsibilities.
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Disclaimer: This article intends to provide general information based on what is a trustee and what are his responsibilities.