Trustee: Trustees often have more ongoing authority, especially in the case of living trusts or long-term trusts. They may manage and distribute assets over many years, depending on the terms of the trust.
In addition to following all directions in the trust document, the trustee is responsible for: Assuming legal responsibility for administration of the trust. Taking control of and protecting trust assets. Handling accounting responsibilities of the trust.
Professional trustee likely going to be the better option in most cases, especially if its a complicated trust.
This is a fundamental concept of trust law: the separation of legal and equitable title. In other words, while the trustee has the legal authority to manage and control the assets, they do so not for their own benefit, but for the beneficiaries.
While trustees may temporarily be able to delay trust distributions if a valid reason exists for them doing so, they are rarely entitled to hold trust assets indefinitely or refuse beneficiaries the gifts they were left through the trust.
Selecting the wrong trustee is easily the biggest blunder parents can make when setting up a trust fund. As estate planning attorneys, we've seen first-hand how this critical error undermines so many parents' good intentions.
The trustee manages the trust and distributes its assets at a prescribed time. The trustee is in charge of managing the assets in an irrevocable trust while the grantor is still alive.
The trustee is the person who controls property inside of the trust and handles investment of trust property. The trustee is responsible for carrying out the terms of the trust agreement.
Once appointed, the Executor “runs” the estate much as a business person runs a business. The Executor makes sure all debts are paid, all taxes paid, all assets cared for, then distributes the remaining assets to the beneficiaries in accordance with law and the Will.
So, now you know that the Trust Maker holds the most power before the Trust is established, but the Trustee holds the most power after the Trust is established. And you also know that in many cases, during your lifetime you have both roles. So who has the most power in a trust? If you are creating it, YOU do.
Establishing and maintaining a trust can be complex and expensive. Trusts require legal expertise to draft, and ongoing management by a trustee may involve administrative fees. Additionally, some trusts require regular tax filings, adding to the overall cost.
If you have a trust and funded it with most of your assets during your lifetime, your successor Trustee will have comparatively more power than your Executor. “Attorney-in-Fact,” “Executor” and “Trustee” are designations for distinct roles in the estate planning process, each with specific powers and limitations.
An executor does not possess the power to overrule or change the terms established by a trust; these roles carry separate responsibilities. An executor's role consists of overseeing and closing an estate as per its will's instructions without disrupting or interfering with their independent functions as trustee.
While a POA agent can make decisions on the principal's finances and health care, their role essentially dies with the death of the principal. A trustee, however, is responsible for the assets held within a trust and their administration following the trustor's death or guidelines of the trust document.
Beneficiaries of trust generally fall into two categories. One type of beneficiary is ultimately entitled to take ownership and control of trust capital and the income it generates as outlined in the trust agreement.
The trustee generally has the authority to withdraw money from a trust to cover the cost of third-party professionals, as well as any other expenses arising as a result of administration.
A revocable living trust is controlled by its creator or grantor while they are alive, allowing them to alter or cancel it at any time. Upon their death, however, the designated successor trustee takes over management of any property held within it according to its terms.
From a legal standpoint, the trust itself is the official owner of any assets that have been retitled and transferred into it – not you as an individual.
One of the trustee's responsibilities is to distribute the assets to the beneficiaries, abiding by the wishes of the grantor. Trusts are often used as an estate planning tool, so there is no confusion to how assets should be distributed upon a grantor's death.
Now, as in medieval times, there are three parties involved when a trust is created: The creator of the trust who at times is referred to the settlor, grantor, or trustor; The trustee who manages and controls the asset, and. The beneficiary, for whom the trustee manages the property.
It is not unusual for the successor trustee of a trust to also be a beneficiary of the same trust. This is because settlors often name trusted family members or friends to both manage their trust and inherit from it.
For example, Gargiulo and Ertug (2006) identify what they call the 'dark side' of trust as occurring when the trustor strays beyond a critical threshold of confidence such that her trust in another becomes inappropriate and ill-judged.
There is no minimum
You can create a trust with any amount of assets, as long as they have some value and can be transferred to the trust. However, just because you can doesn't necessarily mean you should. Trusts can be complicated.
The short answer is yes. Trust beneficiaries can bring a claim against the trustee, so long as they have a valid reason.