Selecting your Trustee is a critical decision when setting up a Trust in Michigan, as this individual will be responsible for carrying out various duties. Please continue reading to learn more about a Trustee’s responsibilities and how a knowledgeable Washtenaw County Trusts Attorney can guide you through this intricate legal process.
What Are the Duties of a Trustee in Michigan?
First and foremost, a Trust is a legal arrangement established by the property owner (Grantor) to transfer legal title or assets to a Trustee, who manages them for the benefit of the property’s beneficiaries. The Grantor is the original owner of the property placed into the Trust. The Trustee is responsible for managing the Trust property, while beneficiaries receive income, principal, or both from the Trust. The entire arrangement, including the management of property, payments of income and principal, and the scope and duration of the Trust, is documented in the Trust agreement.
A Trustee is obligated to carry out the Grantor’s intentions, always acting in the best interests of the beneficiaries. They must adhere to the specific directions outlined in the Trust document. This includes collecting, protecting, and investing Trust assets prudently and making sound decisions about asset allocation. They are responsible for distributing assets according to the terms of the agreement.
Trustees are responsible for maintaining open lines of communication, keeping beneficiaries informed about the administration of the Trust, and responding to their inquiries. They also must defend the Trust against any claims. Furthermore, meticulous record-keeping is crucial. Trusts are subject to numerous taxes, rendering the Trustee responsible for filing all necessary tax returns and ensuring it complies with all applicable tax laws. These duties ensure it’s managed effectively and that beneficiaries’ interests are safeguarded.
Who Should Be Appointed to This Role?
Choosing the right Trustee is a crucial decision, given the extensive responsibilities involved. It’s important to select someone who possesses not only integrity and financial acumen but also the time, willingness, and emotional maturity to handle the complexities associated with this role.
An ideal Trustee should possess strong organizational skills, be trustworthy, and demonstrate a high degree of responsibility. Your first instinct may be to select a relative or longtime friend to serve in this role, as they are likely familiar with your wishes and family dynamics. However, these individuals may lack professional financial expertise, be influenced by personal relationships, or not have the capacity for complex Trust administration. If this is the case, you may consider enlisting a professional Trustee. If you have complex financial matters, investments, or business interests, this may be an appropriate route.
Always be mindful of the responsibilities associated with the role of a Trustee, whether you are selecting someone or considering serving as one. This is especially crucial if the individual is not a professional Trustee. At Collis, Griffor, & Hendra, we are prepared to provide guidance in drafting a comprehensive Trust document, advise you on the selection of a Trustee, and ensure that your estate plan is robust and reflective of your wishes.