Think Twice Before Deciding to Serve as Trustee | Santa Barbara Estate Planning

If you have been asked to serve as a trustee, chances are you were initially flattered by the request. After all, it is quite an honor—a parent or other loved one thinks highly enough of you to entrust you with the management of a major portion of their life’s savings. However, before agreeing to serve as trustee, it is important to consider the responsibilities involved.

Administering a trust typically involves all of the following duties, and sometimes many more:

• Locating and protecting trust assets
• Collecting life insurance policies, annuities, and retirement accounts that name the trust as the primary beneficiary
• Coordinating settlement of the estate with the personal representative if a probate administration is necessary
• Obtaining the values of all trust assets at the time of the trustmaker’s death. These assets include real estate and business interests
• Ascertaining and paying off all of the trustmaker’s debts from funds remaining in the estate
• Assessing income and estate tax liabilities
• Preparing and filing all required income and estate tax returns
• Paying the ongoing expenses of administering the trust until it can be terminated and distributed to beneficiaries
• Raising the cash necessary to pay off debts, the ongoing expenses of administering the trust, and estate and income taxes
• Investing and managing trust assets until they can be distributed to beneficiaries
• Distributing all assets left in the trust after all of the aforementioned debts, taxes and expenses have been paid

Accomplishing all of these tasks is both time-consuming and, in many instances, extremely complicated. The first question to ask yourself is whether or not you actually have the time and the skills necessary to administer the trust. Another factor to consider is that a trustee can be held personally and financially responsible for failing to carry out the mandates of the trust to the letter. Even if a mistake was inadvertent, the penalties can be severe.

Given all of this, it is clear that the decision to serve as trustee should not be taken lightly. If you are considering whether or not to accept the role of trustee, we can help you understand the responsibilities and risks involved. If you decide to serve as trustee, we can guide you through every stage of the process. If you would prefer not to accept this responsibility, we can help you choose the ideal person to serve in your place. Please give us a call at (805) 946-1550 to start this process today.