A trustee is someone who manages the financial and business affairs of a specially protected person. The trustee is appointed by the court to take over the protected person’s property due to many reasons. In legal terms, a trustee is someone who holds something in trust for another person. As there are certain standards in handling the protected person’s assets, it does directly influence the trustee’s actions at all times. They can and should only make investments that are in the interest of the protected person’s safety. 

Why are trustees needed? 

trustees are needed when a certain individual cannot manage themselves. The reasons can be many. A lot of times, the individual may be mentally challenged or physically challenged. For the most part, trustees are often appointed for people who are mentally incapable of making their own sound decisions. 

The court will investigate and find out why the individual may need a trustee to make decisions for themselves and their life, especially for adults. Extensive investigations, studies, and reports will be carried out on the individual’s overall being and state until the judges can come to a final decision. Only then will the judges strongly believe if the individual really needs a trustee or not. 

What are the responsibilities of a trustee? 

A trustee has a few responsibilities and duties over the protected person. Here are a few key responsibilities of a trustee. 

  • a. Paying bills and taxes on their ward’s behalf
  • b. Managing the finances of the protected person’s real estate, which includes mortgages, taxes, and insurance.
  • c. Paying for the protected person’s education, healthcare, and other expenses
  • d. Developing plans to make sure that the protected person’s needs are met accordingly
  • e. Wisely investing the protected person’s finances
  • f. Ensuring that the protected person receives all governmental benefits that they are entitled to
  • g. Recover any and all assets due to the protected person paying all reasonable and necessary expenses from their assets 

A trustee must not do the following: 

  • a. Mix the protected person’s assets with their own assets
  • b. Make loans to yourself or to any 3rd person
  • c. Carry out any and all questionable or risky investments
  • d. Pay themselves an attorney without court approval 

What are the best ways to be a trustee? 

There are a few ways to be the best trustee to any protected persons. You may not be needed to pay the expenses of the protected persons from your own personal assets. You will have to disclose to those who you are dealing with that you are acting on behalf and in the capacity of the protected person. Make sure that when you do so, your name is listed as a trustee legally. It can be set up as soon as you have received your letter of appointment. 

1. Keep your respective assets separate 

The most common thing to do is to keep your assets separate from the protected person’s assets that you are also managing. When you open a bank account from the protected person’s estate, the account will have to mention that it is a trusteeship account and not your personal account. 

You should never deposit estate money in your personal account. You should also never mix estate money with your own, or anyone else’s for that matter. Not even for a short time. 

2. Make smart investments 

If you are a trustee for a protected person’s estate, you should manage it as though you are managing your own estate. Make the best decisions for the protected person’s estate and make sure that it will benefit them long term. Always remember that you are responsible for someone else’s properties and assets. Don’t make any risky investments. 

3. Stick to restrictions 

There are certain restrictions to managing a protected person’s estate. Unless you have explicit court orders, then you simply cannot do the following: 

  • -Pay yourself or a lawyer with the estate’s money
  • -Pay yourself room and board
  • -Give away any part of the estate
  • -Borrow money from the estate 

Without a court order or approval, then you don’t get permission from the court prior to acting. You will have to pay back the estate with your own money and you will be removed as trustee. 

Bottom Line 

A trustee should act in the interest of their protected persons. If in any given circumstances they are found to breach the trust of the protected person, they will be removed as trustees. 

If you need to appoint a trustee legally, feel free to reach out to us today.