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How do you know if the trustee is doing his or her job?

Many New York residents use trusts as part of their estate planning. This allows them to leave assets to beneficiaries without the need for them to go through probate. It also allows the trustee to make distributions at particular times or upon particular events.

One of the most important decisions a trust creator makes is choosing a trustee. The person creating the trust makes a decision with the information available at the time. Whether that person lives up to the trust creator's expectations comes later.

What does a trustee do?

As a beneficiary, you may struggle to understand whether the trustee is doing his or her job. Understanding the basic duties of a trustee may help. When an individual decides to accept an appointment as a trustee, he or she takes on a fiduciary duty to you and any other beneficiaries, along with certain responsibilities, including the following:

  • The trustee must keep records of every transaction performed on behalf of the trust. When it comes time to close out the trust, you may require the trustee to prove to you that he or she administered and distributed all of the assets.
  • Before that time comes, the trustee must gather all of the assets of the trust and protect them.
  • During the administration of the trust, the trustee must put a plan into place to ensure that the investments in the trust continue to generate income for the beneficiaries.
  • The trustee is also responsible for ensuring that the trust's taxes are filed and paid.

The trustee also needs to create regular accountings of the trust's assets that the beneficiaries may review.

What can a beneficiary do?

If you review an accounting and something doesn't make sense, you may request a special accounting from the trustee. You may come to believe that the trustee failed to perform his or her duties properly. Whether by mistake or design, you think the trustee mismanaged the assets in the trust. You have the right to take action if you believe the trustee has breached his or her fiduciary duty to you.

Before proceeding, it may help to confirm your suspicions by conducting a more in-depth investigation. As part of that investigation, you may want to research your rights and legal options. It may be as simple as discussing the matter with the trustee or clearing up a misunderstanding. If that fails to achieve the results you need, you may need to take further action. If the situation warrants it, you may need to file a lawsuit to protect your rights.

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