When someone creates a trust, they must appoint a person or institution to manage the trust’s assets and carry out its terms: a trustee. In short, a trustee is legally responsible for managing trust assets for the benefit of someone else. They must act with honesty, care, and loyalty to ensure they manage the trust in the best interests of the beneficiaries. If you were named as a trustee, you might find yourself asking:
- What is a trustee?
- What do they do?
- Can anyone help me in my role as a trustee?
At Massingill, we help Texans create and manage trusts with confidence. Our estate planning team works with individuals, families, investors, and healthcare professionals to build personalized trust structures that meet their goals. We offer flat-fee services, clear timelines, and secure online access to your documents. Whether you are considering creating a trust or have been named a trustee, we can help you understand your role and responsibilities.
What Is a Trust?
Before discussing trustees, it’s important to understand how trusts work. A trust is a legal arrangement that splits legal and beneficial ownership over property, allowing the trust to own property for another’s benefit. People use trusts to provide for loved ones, protect their interests, and support charitable causes.
Roles
Every trust involves three key roles:
- Grantor—person who creates the trust (also called settlor);
- Trustee—person or institution responsible for managing trust assets; and
- Beneficiary—person or group who benefits from trust assets.
Depending on how you structure your plan and goals, the same person may fill all three of these roles, or you might have different people filling them.
Property Held in Trust
When someone creates a trust, they fund it by transferring asset ownership so the trust owns the assets. Trusts can legally own many types of property, including:
- Real estate, such as a home, rental property, or land;
- Financial accounts, including checking, savings, investment, and retirement accounts; and
- Personal property, like jewelry, art, collectibles, or vehicles.
The trustee has the right to control assets within the trust but must do so according to the trust’s terms.
What Types of Trusts Exist?
A trust’s structure can affect the trustee’s authority and degree of accountability. Trusts generally fall within the following four categories:
- Living. A grantor creates and funds a living (“inter vivos”) trust during their life.
- Testamentary. These are trusts created through an individual’s will, with funding occurring after the individual dies.
- Revocable. The grantor can change or revoke a revocable trust at any time during their life. They can amend trust terms, change trustee responsibilities, replace the trustee, or transfer trust property back to themselves.
- Irrevocable. Grantors cannot change irrevocable trusts except under very limited circumstances. These trusts are commonly used for asset protection strategies.
The characteristics of trusts vary based on the timing of funding, ease of modification, and purposes.
Trust Purposes
Every trust is created for a specific purpose, shaping the roles and duties of the trustee. Common trust purposes include:
- Providing financial support for someone with special needs without jeopardizing their access to government benefits;
- Setting aside funds for a surviving spouse while preserving assets for children;
- Donating to a religious, educational, or charitable organization; and
- Managing property for minor children until they reach a certain age.
The trustee must always act to support the trust’s purpose. For example, if a trust’s purpose is to supplement public benefits for a disabled beneficiary, the trustee must be careful not to make distributions that interfere with eligibility.
What Is a Trustee?
A trustee is the person or institution a grantor appoints to manage a trust’s assets. Trustees must act in the best interest of the beneficiaries and the trust. They are guided by legal obligations, the trust’s structure, and its terms.
What Does a Trustee Do?
Trustees play an important role in managing the trust according to its terms, and that beneficiaries receive whatever benefits they might be entitled to. This role includes:
- Manage trust property by collecting income from investments, maintaining real estate, managing business interests, or getting insurance;
- Distribute assets to beneficiaries according to the trust, such as sending monthly payments or covering medical or educational expenses; and
- Handle administrative tasks, including paying taxes, keeping financial records, working with professionals like accountants or appraisers, and filing required reports.
Beneficiaries depend on the trustee to honor and enforce the trust’s terms and can bring legal action if they do not.
What Is a Trustee in a Trust?
A trustee in a trust is the person or entity with the legal right to control trust assets. The trustee gets their authority from the terms of the trust agreement.
What Is a Trustee in a Will?
A trustee in a will is typically someone appointed to manage a testamentary trust. The difference with this trustee is that their appointment does not come into effect until the individual who made the will dies.
What Fiduciary Duties Does a Trustee Have?
Trustees have fiduciary duties—they must always act in the best interest of the beneficiaries. These fiduciary duties include the following:
- Duty of loyalty—act in the best interests of the beneficiaries and never place personal gain above the trust’s goals;
- Duty of care—manage trust assets carefully and responsibly, making decisions as a reasonably prudent person would under similar circumstances;
- Duty of impartiality—treat all beneficiaries fairly and avoid favoring one over another contrary to trust terms;
- Duty to follow the trust—carry out the instructions in the trust document as written, without adding, removing, or changing terms;
- Duty to inform and account—provide accurate, timely information to beneficiaries and report regularly on trust management decisions; and
- Duty to maintain records—keep detailed records of transactions and decisions, including formal accountings that show income, expenses, and distributions.
These duties apply to every trustee.
Get Help Navigating Trusts with Confidence
At Massingill, we simplify complex legal matters so you can move forward with peace of mind. Our estate planning attorneys advise individuals, families, professionals, and business owners across Texas. We believe in clear answers, strategic guidance, and collaboration that puts your needs first. If you are serving as a trustee or planning to name one, we invite you to contact us today.
Joshua Massingill
Joshua Massingill is an attorney practicing in Austin, Texas. He serves on the Texas State Bar’s Law Practice Management Committee, the Leander Educational Excellence Foundation (LEEF) Board of Directors, and the Success-Werx Board of Advisors. He mentors young entrepreneurs in Leander ISD’s INCubatorEDU program and is active in his church.
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