Illinois estate plans often include trusts that name an individual to administer the contents. The trustee typically is separate from the estate administrator, as managing the trust requires significant time and commitment. If you are the trustee for a loved one, you have a fiduciary responsibility to the beneficiaries.
According to Fidelity, a trustee handles all assets in the trust. This includes the tax filings and the distribution to the beneficiaries per the trust requirements. If the heirs disagree with your trust management, they might file a breach of duty lawsuit.
Duties of a trustee
You have a legal obligation to act in the trust’s best interest, and Illinois statutes hold your behavior to high standards. Duties typically include the following:
- Compiling an inventory of estate assets
- Conducting a valuation of the assets
- Evaluating the potential estate tax and income consequences
- Ensuring the surviving spouse retains assets in the trust, sheltered from creditors and estate taxes
- Distributing assets after paying debts and taxes
Depending on the details and requirements of the trust, you may be responsible for investing the assets and ensuring their preservation for future beneficiaries.
As a trustee, you have protection under state statutes and the trust. However, if the provisions are ambiguous or anything goes wrong with the trust contents, you might shoulder the responsibility. This could impact you financially.
Document your actions, ensuring they are in accordance with the provisions of the trust. Communicating with beneficiaries in writing and following up with a written summary after an in-person meeting can reduce the chances of miscommunication. Trust management and administration can be complex. Understanding your responsibilities and the legal aspects of your duties can help you avoid litigation and resolve issues before they arise.