TRUSTEES HAVE TRUST ADMINISTRATION DUTIES TO THEIR BENEFICIARIES

When a Polk County resident decides to put together an estate plan, trusts may enter the picture if they work well with the person's asset situation and estate planning goals. Lots of people associate trusts with pampered rich people, but the reality is that trusts can be key to many people's estate plans. But what exactly is a trust?

A trust is basically a conditional transfer of property from one person to another. In order to create a trust, a person transfers property to another person, called a trustee. The transfer is conditioned on the trustee's agreement to use the property to benefit a third party, called a beneficiary. In return for their trust administration role, trustees are often compensated. Other trustees perform their duties as volunteers.

A trustee is required to perform their duties in the best interests of the beneficiary. This duty is called a fiduciary duty. If the trustee does not fulfill their fiduciary duty to the beneficiary, the trustee may be liable to the beneficiary for any damage to the beneficiary's interests.

When a person funds a trust for the benefit of another, the person will use a trust instrument to establish duties for the trustee to perform. These can include distributing the funds in a designated manner after the death of the creator of the trust. It all depends on the terms of the trust.

Trusts can be complicated entities, and they may have to be set up to accord with tax rules. An estate planning attorney can provide advice on doing this right.

Please reach out to us at 141 5th Street NW, Suite 300, Winter Haven, Florida 33881 at 863.294.1114.

Established in 1991, Rignanese & Associates is available to work with clients on their legal needs.

On behalf of J. Kelly Kennedy, Attorney/CPA, PLLC, which has been acquired by Rignanese & Associates, PLLC.