Many times, trusts are administered by professionals who are used to the task, but there are also cases when a family member or other trusted individual is placed in charge of a trust. This is especially common if a trust was set up to help ensure that a minor child or other dependent is taken care of in the event a parent or provider passes away. If you are suddenly thrust into the world of trusts, it can be confusing. Here are three common steps you’ll need to take.
First, you need to read the entire trust document. It’s actually a good idea to read the document multiple times and take notes about your responsibilities and the details of the trust. This can be difficult if you aren’t familiar with legal terminology, as trust documents are often filled with such verbiage. Working with an estate lawyer can help you understand the meaning behind such a document.
Next, you need to know to whom you owe any accounting of the trust and how and when those accountings must be made. As the trustee, you might have to send a bookkeeping report to someone else administering estate matters or to a court, for example. The rules regarding trust accounting differ in each state and according to the individual wishes of the person who created the trust.
Finally, you must understand who the beneficiary of the trust is, how much you are supposed to disburse to them from the trust and what rules govern those disbursements. You might be required to receive receipts proving that trust funds are used in accordance with trust guidelines, or you might simply provide the beneficiary with a certain stipend about each month.
Source: National Academy of Elder Law Attorneys, “10 Tips on Administering a Special Needs Trust,” Ruth A. Phelps, accessed July 08, 2016