Being named trustee for a family member is an important responsibility. In this role you will take on a number of essential tasks such as managing money, making decisions that maximize the wellbeing of the trust beneficiary (your loved one), and reporting on how the trust funds are being used. If you haven’t acted as a trustee before, there’s a lot to learn about your duties and the rules that govern trusts — as well as how best to navigate this new relationship dynamic. In this post, we’ll walk through what to expect when you first become a trustee for a loved one and share some additional resources where you can learn more. 

Understand the basic duties and rules of being a trustee 

There are a number of rules, guidelines, and regulations that family members need to follow when acting as trustee. Regardless of the type of trust you are administering, there will be fiduciary duties that apply to your role. As a trustee, you will be managing money and other assets for someone. This means you are — by law — considered a fiduciary. As a fiduciary, you have a number of duties to fulfill (you can read more about those here), but essentially, you  have the duty to manage the trusts assets for the benefit of the trust beneficiaries, not yours.

Find experts who can help you navigate this role 

While being a trustee may be new to you, there are many experts you can turn to in order to build a support network. Professionals like elder law attorneys, accountants, financial advisors, special needs planners, case managers, social workers, or real estate/property managers can help with different aspects of trust management. But not all experts in these fields will have experience working with trusts, so make sure you ask about their work with trustees before choosing to work with them.

Depending on the type of trust you are administering, there will be additional rules that regulate how trust funds can be used. In particular, Supplemental or Special Needs Trusts (SNTs) have restrictions on how beneficiaries can spend their money if they want to remain eligible for public benefits. You can get started on the right foot as an SNT trustee by familiarizing yourself with these rules and learning how to make informed decisions about trust distributions.

Familiarize yourself with the trust document 

In addition to rules that govern trusts more broadly, there will often be additional guidelines in your loved one’s trust document that the trustee is responsible for adhering to. This may include specifics on how trust funds can or cannot be used, how other assets like property should be managed or maintained, and who should be consulted when making decisions on behalf of the beneficiary. Experts recommend that trustees work with an elder law or special needs attorney to walk through the responsibilities as outlined in the trust. 

Create a trusting relationship with your loved one as their trustee

Transitioning into a trustee-beneficiary dynamic can be tricky, even if you have a good existing relationship with your loved one. Making decisions about how someone else can use their money is likely a new responsibility for you — and having to ask someone before they spend money may be a new experience for your loved one as well. Start by acknowledging this new dynamic, explaining your responsibility as trustee (to use trust funds for their benefit), and asking questions about their needs, goals, and interests. And when you start approving or pushing back on requests for money, communicate what you are doing and why. Here are some helpful tips about establishing effective relationships with trust beneficiaries. 

Prepare for your “day two choices”

Once you step into your role as trustee, there will be a number of what can be called “day two choices.” Peter Wall, True Link Financial Advisor’s Head of Fiduciary Services, calls out housing and caregiving as examples of the decisions trustees may need to make early on. Is it appropriate for your loved one to stay in their current living situation? Do they need to move into a group home? Should you pay a family member to act as a caregiver or hire a professional? While some of these details may be outlined in the trust document, others may leave the decision-making power in your hands — this can be a good time to solicit the guidance of experts around you. 

Set up a recordkeeping system

Recordkeeping is an important part of any trustee’s job. Maintaining accurate, timely records are particularly important when it comes to tax filings, court reports, and maximizing public benefits. Some trustees use a spreadsheet in Microsoft Excel or Google Sheets or accounting software like Quickbooks or Quicken. Others rely on robust trust administration tools like the True Link Platform that allow you to set a budget, pay bills, disburse funds, attach receipts, and more. Here are more tips on how to stay compliant as a trustee. 

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Stepping into the role of trustee can be an isolating experience, but it’s important to remember that you’re not alone. Every day, family members like you successfully navigate these responsibilities, leaning on the expertise of professionals along the way. With expert guidance and helpful resources, you can be confident that you are fulfilling your trustee duties as well as maintaining a healthy relationship with your loved one.

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