Asked by: Sufen Viggiani
Asked in category: personal finance, life insurance
Last Updated: 23rd Jul 2024

What does it mean to be a trustee of a trust?

Any person or organization which holds the legal title to an asset or group for another person is called a trustee. The trustee is responsible for managing all assets and property owned by trusts for the benefit of beneficiaries.

What is the role and responsibilities of trustees in this regard?

The trustee is the legal owner of trust assets and is responsible to handle any assets in trust, make tax filings for trust and distribute the assets according the terms of the trust. Both roles have legal requirements.

What are the duties of a trustee for an irrevocable trust, other than those mentioned? The trustee of an irrevocable trust is responsible for many legal and administrative duties. She must be honest and trustworthy in managing the trust's affairs. She is responsible for overseeing trust assets and finances, paying bills, and distributing trust income to beneficiaries.

It is also useful to understand what an example trustee looks like.

A trustee is responsible for managing cash, assets and property titles on behalf of a beneficiary. The trustee acts as a mediator between Company XYZ (but it allegiance is to bondholders) and receives a fee for this role.

What is the normal fee for a trustee?

Professional trustees (banks, trust companies and law firms) charge 1.0% to 1.5% per year depending on the trust's size. A trust with $200,000 would have to pay $3,000 annually, and a fee of 1.5%. This may or may not be enough to cover the costs of the trustee.