If you’ve been asked to serve as a trustee, or have already started serving, there are some important things you need to know.
Trustees should carefully read the trust document. That’s the legal document signed by the trust maker (or settlor) that creates the trust. Specific powers may be given to the trustee in the trust document.
The list of specific powers granted under Virginia law is long. Generally, trustees may do the following unless the trust contains limitations:
- Assets: Collect and manage trust assets. Acquire, sell, repair, alter, demolish, abandon, develop, manage, insure, lease, and rent properties. Deposit trust money, borrow for the trust, mortgage trust property,
- Business Interests: Continue business or enterprise operations. Take action as if a shareholder, member, or property owner. Exercise ownership rights over stocks and securities.
- Trust: Gather and manage claims against the trust. Pay trust-related expenses, including taxes and assessments. Appoint trustees to act in other jurisdictions. Make distributions to care for special needs beneficiaries. Resolve disagreements about the trust. Terminate the trust when it’s time.
Trustees take on quite a job. They need to know what to do – and what not to do.
A trustee’s primary job is to act in the best interests of the trust at all times. So, there are things trustees should not do. For example, they can be removed for any of the following behavior:
- Committing a serious breach of trust;
- Failure to cooperate in a way that damages administration of the trust;
- Failing or becoming unwilling to administer the trust; or
- Anything that causes a court to feel removal is in the best interests of the beneficiaries.
A trustee’s work is never done, and they deserve to be compensated.
Fortunately, trust documents often state how to pay the trustee. But, if the trustor neglected to do that, the trustee is still entitled to compensation. It just might have to be determined by a judge. According to state law, trustees can even be paid more or less than the amount specified in the trust. A court will decide what’s appropriate.
And trustees should keep their receipts. Expenses related to administration of the estate are often reimbursable.
Bowing Out Gracefully.
It’s a free country. So, reluctant trustees can decline before accepting the trusteeship.
However, trustees who have already been on the job should give 30 days’ notice to anyone involved in the trust. Without notice, trustees can resign, but with court approval. Note, however, that the court may place limitations and conditions on the trustee’s departure.
Trustees may be removed even if they don’t want to be. Someone involved with the trust may ask for the removal. Courts may also remove trustees who engage in the kind of conducted noted in the section above on what not to do. The now-former trustee owes a duty to deliver trust property to the successor trustee or new trustee as quickly as possible.
Call if You Have Questions About Trustees.
The lawyers at Dillon Law Group, PLC, provide individualized advice to our clients. Give us a call at 757-962-4796 or use our convenient Contact Form. We assist clients in the Virginia Beach and Newport News areas.