When creating a trust, one of the most important decisions you'll make is choosing a trustee. Many people instinctively select a spouse, adult child, sibling, or close friend, ultimately landing on someone they know and trust.
But have you ever stopped to consider what serving as a trustee actually involves?
For many military families, a revocable living trust names the trust creators—often husband and wife—as the initial trustees. This allows them to maintain control over their assets throughout their lifetime. In many cases, the successor trustee you've named won't step into the role until one or both of you are no longer able to serve due to incapacity or death.
While that day may seem far away, understanding the responsibilities of a trustee today can help you make more informed decisions about who is best suited to carry out your wishes tomorrow.
A trustee is responsible for administering your trust according to the instructions outlined in your trust document. Their responsibilities begin when they are called upon to serve and continue until the trust has been fully administered. This can continue even longer if the trust is designed to benefit beneficiaries over many years.
Depending on the terms of the trust, a trustee may be responsible for:
• Managing and protecting trust assets
• Working with attorneys, accountants, tax professionals, and financial advisors
• Maintaining accurate financial records
• Filing required tax returns
• Paying bills and expenses from the trust
• Making distributions according to the terms of the trust
• Communicating with beneficiaries
• Acting impartially and in the best interests of all beneficiaries
Every trust is unique, and a trustee's responsibilities can vary depending on the complexity of the estate and the provisions of the trust.
Serving as a trustee involves much more than managing money.
A trustee may be called upon to interpret trust provisions, answer questions from beneficiaries, coordinate with professional advisors, and make thoughtful decisions while carrying out the grantor's wishes. These responsibilities often arise during an emotional period for a family and require both sound judgment and careful administration.
In some situations, trustees may also need to make discretionary decisions or balance the interests of multiple beneficiaries. Even in close-knit families, these responsibilities can create emotional challenges and place significant demands on the individual serving in the role.
For trusts established to benefit children, grandchildren, or individuals with special circumstances, these responsibilities may continue for years, or even decades.
Many individuals successfully appoint a trusted family member or friend to serve as trustee. For some families, that remains the right choice.
However, it's worth considering whether your chosen trustee has the:
• Time to devote to administering the trust
• Financial and organizational skills needed to fulfill the role
• Ability to remain objective when making decisions
• Willingness to accept the responsibility
• Long-term availability to serve
It's also important to consider how family dynamics may affect trust administration. While many families work together successfully, serving as trustee can place a loved one in the position of making difficult decisions, communicating with multiple beneficiaries, and carrying out responsibilities that may be emotionally challenging.
For some families, appointing a professional fiduciary or naming a professional to serve alongside a family member as a co-trustee, can provide continuity, experienced administration, and objective decision-making while helping reduce the administrative burden placed on loved ones.
Even if you're serving as your own trustee today, your successor trustee deserves careful consideration.
Ask yourself:
• Is my successor trustee still willing and able to serve?
• Do they understand the responsibilities involved?
• Have their personal circumstances changed?
• Would they feel comfortable managing trust assets and communicating with beneficiaries?
• Would a professional trustee better support my family's long-term goals?
Reviewing these appointments periodically helps ensure your estate plan continues to reflect your wishes as your family and circumstances evolve.
Choosing a trustee isn't necessarily a one-time decision.
As your family, finances, and goals change over time, it's a good idea to periodically review both your trustee and successor trustee selections to ensure they continue to align with your wishes.
Whether your trustee is a family member, friend, or professional fiduciary, understanding the responsibilities of the role can help you make informed decisions that support your loved ones for years to come.
If you're unsure where to begin or need assistance with trust planning, AWM&T offers guidance tailored to the unique circumstances of your military family. With our support, you can create a comprehensive plan that ensures the financial security of your loved ones.
Contact us today to learn how choosing a fiduciary like AWM&T is a wise financial decision for military professionals like you. Your financial success is our ultimate goal, and we are here to support you every step of the way. Speak to a professional or call 910-307-3500 to get started.
Founded in 2012, AAFMAA Wealth Management & Trust LLC (AWM&T) was created to meet the distinct financial needs of military families. We proudly deliver experienced, trustworthy financial planning, investment management, and trust administration services – all designed to promote lasting security and independence.
We are proud to share the mission, vision, and values of Armed Forces Mutual, our parent company. We consistently build on the Association’s rich history and tradition to provide our Members with a source of compassion, trust, and protection. At AWM&T, we are committed to serving as your trusted fiduciary, always putting your best interests first. Through Armed Forces Mutual's legacy and our financial guidance, we provide personalized wealth management solutions to military families across generations.