From the May 2007 issue of Investment Advisor • Subscribe!

May 1, 2007

Responsibilities of a Trustee

In general, a trustee will:

  • Interpret the terms of the trust
  • Hold the trust property
  • Invest the assets
  • Distribute the trust's income and/or principal to beneficiaries
  • Make tax decisions concerning the trust
  • Keep records of all trust transactions
  • Provide accurate statements
  • File tax returns
  • Issue tax reports
  • Answer questions from beneficiaries

And in picking a trustee, remember to ask these five questions

  1. Do your clients trust this person to be true to their interests?
  2. Are your clients focusing more on themselves in the selection process than on the potential trustee?
  3. Will naming this person cause family tension or a rift?
  4. How is the health of the chosen trustee?
  5. Does it make more sense--financially and otherwise--to name an outside professional as a trustee?
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