Co-Trustees Must Understand Their Many Responsibilities

Scott Grossman

Scott Grossman

Attorney

The Grossman Law Firm, APC · 525 B Street, Suite 1500, San Diego, CA 92101 · (951) 523-8307

Carrying out a trust administration is not always an easy process. At first glance, it may seem that trusts that have multiple trustees acting together may help to alleviate some of that burden. Unfortunately, that is not always the case. Co-trustees must understand their responsibilities and act together in order to accomplish a smooth trust administration.

Co-Trustee Responsibilities:

What are some of the responsibilities of co-trustees? The following is an overview:

  1. Management of trust assets. This may include the opening and closing of bank accounts, investment of trust funds in stocks or other assets, and buying and selling of property. The trustees are also responsible for keeping accurate records relating to the trust assets and providing regular accountings to the trust’s beneficiaries. When there are multiple trustees serving simultaneously, the trust document may place one specific trustee in charge of this duty. If the trust does not specify one trustee to fill this role, both trustees must act together and in agreement when managing the assets of the trust.
  2. Filing all necessary tax returns. This is true on a federal, state, and local level. Trusts may be responsible for estate taxes as well as income taxes. Trustees are responsible for making sure that taxes are paid and filed on time. Unless the trust instrument states otherwise, co-trustees are equally responsible for carrying out this duty and must act together in order to do so. It is important to note, however, that co-trustees may seek assistance from an accountant or tax attorney.
  3. Distribution of assets to the beneficiaries. Co-trustees are responsible for overseeing and carrying out the distribution of these assets as outlined in the trust instrument. This process may be more complicated than simply writing a check, as some beneficiaries may be minors, or the trust may give specific instructions such as having distributions made directly to educational institutions for the beneficiary’s benefit. Regardless, the co-trustees must work together to accomplish this important task unless the trust document gives this authority only to one trustee.
  4. Cooperation with co-trustees. All trustees must act in the best interest of the beneficiaries of the trust, and doing so requires cooperation among the trustees. This is especially true when the co-trustees have to act together in order to accomplish the trust administration tasks.

If you are in charge of administering a trust, we can help. Contact us today at (888) 443-6590 for more information. Or, fill out our quick and easy online form to allow us to further assist you.

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