It is common that a grantor (the person who creates a trust) is the first acting trustee of their Revocable Living Trust. This article will apply to those who are separate from the grantor.

What is a trustee?

A trustee is a person or institution (a corporate fiduciary) that has been put in charge of managing assets in a trust. Trustees are legally bound by a trust document to act consistently with the terms of a trust. Trustees hold legal title to property and beneficiaries have equitable interest in the property (that is the right to an economic benefit. Your trustee receives the property and accepts the obligation to hold the property for the benefit of your beneficiaries.

Who is an ideal trustee?

Your trustee generally has a duty to be prudent, carry out the terms of the trust, duty to be loyal, duty to account to beneficiaries, and the list goes on. Based on that list, your trustee should be someone who is responsible with finances. While your trustee does not need to hold a degree in finance, Ideally, your trustee will be capable of keeping track of trust funds and assets. If that is not the case, then be sure that they can and would delegate the duty to someone who can take on this responsibility.

You should trust your trustee based on your specific circumstances. If you have a large estate, for example, you may want to have a corporate trustee manage your assets because of their expertise in the field. There are no formal requirements to be a trustee. It is very common for individuals to elect their family members or close friends to serve as trustees.

Remember, no one is born doing this.

Can a person refuse to be a trustee?

Absolutely. If a person is unwilling or unable to act serve as trustee, they can refuse to do so. Generally, this refusal must be in writing. There can be numerous reasons for a person or institution to decline to take on this position but that is why communication is essential. You don't necessarily have to disclose all of your personal affairs with your intended trustee if they do not have to act as trustee until a later date, but it may be wise to at least inform them that they have been named to serve as trustee in the future.