The job of a trustee is to oversee or manage the assets of a trust according to the instructions of the person who created the trust (the grantor). They have a legal duty to manage the assets in the best interests of the beneficiaries and cannot favor one beneficiary over the other. This can sometimes create conflicts of interest, especially when the trustee is also a beneficiary.
A trustee can be a relative, a friend, or a professional, such as a private fiduciary or an employee of a bank or corporate trust department. While a relative or a friend may have a more personal and intimate understanding of the grantor’s wishes, they may not have the skillset or time to manage the trust. On the other hand, a professional may have the skillset and resources to manage the trust effectively but may not understand the family dynamics or the grantor’s wishes.
The trustee is responsible and liable for all outcomes of the trust. Therefore, the decision to appoint a trustee should not be taken lightly as trustees often have a lot of leeway to make important decisions on behalf of the beneficiaries. In addition, the decision to accept the responsibility of being a trustee for a friend or family member should also not be taken lightly as the amount of work and legal liability may be an unwelcome source of stress.