Requirements of a Trustee

Pennsylvania Beneficiary & Trustee Requirements

Depending on the law and trust agreement, being a trustee requires monitoring the trust and providing updates of trust activity. Informing and reporting activity within a trust not only benefits the interests of the trust’s beneficiaries, but also helps with trustee liability. Make sure you and your family or business are prepared in the event of an unfortunate event.

What is a trustee?

A trustee is the individual who has been named by a settlor and is legally responsible for properly administering a trust for a specified beneficiary. A trustee will follow a trust and its instructions, according to how the trust was created.

How to approach being a trustee

Since every trust is different and may require specific duties of a trustee, it’s necessary to pay close attention to Pennsylvania state law and the specific trust provisions.

Each trust will be different, each settlor (the trust creator) will have certain specifications that are unique to them and the trust that they have created. The trustee is obligated to follow the instructions the settlor has given.

Generally, as a trustee, it is good practice to always inform the beneficiaries of changes in the trust, especially if it affects the beneficiary directly. It is also the trustee’s duty to respond to the requests of the beneficiary.

Communication with Beneficiaries

First and foremost, once a settlor has died or becomes incapacitated, a notice must be given to the beneficiaries by the trustee. This notice should include that a trust exists, identity of settlor and trustee, and the beneficiary’s right to request a report. 

As time goes on in managing the trust, reporting information to a beneficiary is expected to be accurate information given in a timely manner by the trustee. It is expected that the trustee responds to requests or questions made by the beneficiary. Not only does this create a transparent relationship between the beneficiary and trustee, it also protects the interests of all who are involved with the trust.

There are frequently trusts that have multiple beneficiaries. It is important for a trustee to communicate with each beneficiary and be aware of their interests. This is essential for treating each beneficiary fairly, consistent with the trust provisions.

Changes In A Trust

Changes in a trust should also be communicated to all beneficiaries. Whether there is change in trusteeship or change in assets, a beneficiary should always be notified.

Managing Trust Assets

Being a trustee means you will be in charge of certain assets that the settlor previously owned. Regarding all property specified by the trust, the trustee needs to keep the trust property separate from his/her own property. This will prevent conflicts of interest or legal action against a trustee.

Documentation and Reporting

The duty of reporting information of a trustee may include: day-to-day operations, asset distribution, transactions, and investments. It is important to track every expense, all income, and each change. Accurate records are proof that the trustee properly performed their duties of managing the trust.  

Responsible documentation is crucial as a trustee given that a beneficiary is entitled to annually periodic written financial reports that relate to the activity within the trust.

Seeking Legal Advice

Have you been named as trustee and are unsure how to navigate the obligations and disclosure requirements of informing and reporting trust activity?

The attorneys at Pyfer Reese Straub Gray & Farhat are here to assist you in understanding your requirements as a trustee. Contact us today at 717-299-7342 to schedule a convenient appointment to discuss your needs at our Lancaster, Willow Street, or Ephrata office.

Disclaimer: This blog article is meant to be general in nature and in no way qualifies as legal guidance or advice. If you need or would like legal guidance or advice on your particular situation, please reach out to our office for a free consultation.