Six Common Assets That Must Be Managed by a Trustee

When implementing a trust, the successor trustee has many responsibilities and obligations. One important duty is to manage the assets of the trust. The types of assets that can be held in a trust are many and varied. The tasks related to managing assets are often different depending on the asset type.

Assets Managed by Successor Trustees

What types of assets can a successor trustee expect to manage? The following is an overview of some of the more common.

Real Estate

The successor trustee is responsible for managing real estate held in the trust. For example, the trust may be the record titleholder of a multi-family property off the Santa Anna Freeway. These duties may include ensuring that the property remains insured, renting the property, selling the property, or paying the mortgage.

Investments

The successor trustee must handle the trust’s investments carefully. Investments should be made wisely and in accordance with the trust’s terms. In many cases, the successor trustee may wish to seek guidance from a financial advisor—as managing trust investments requires an expertise that many people do not have.

Cash

When it comes to cash, the successor trustee must be careful to ensure that there are sufficient liquid assets around for paying trust bills, while also ensuring that trust assets remain productive.

Personal Property

With regard to personal property held in a trust, the successor trustee must oversee the assets and distribute them in accordance with the trust terms. Personal property may include such assets as furniture, clothing, jewelry, or artwork.

Retirement Accounts

Successor trustees should seek guidance when it comes to retirement assets left to a trust. Special tax rules apply to these assets, and if not handled properly, there can be negative consequences for the trust and its beneficiaries.

Business Interests

When a trust holds business interests of the decedent, unique issues may arise. For example, is the trustee responsible for any of the day-to-day management of the trust, and does the trustee have voting ability? It is important to consult with an attorney who can carefully review the business documents, including operating agreements, shareholder agreements, buy-sell agreements, and by-laws.

If you are the successor trustee of a trust and suddenly find yourself in charge of managing trust assets, we can help. Contact us today at 714-459-5481.

 

James F. Roberts
Founder and owner of the Law Office of James F. Roberts and Associates, a premiere estate planning law firm