A trustee is the person responsible for managing the assets inside a trust according to the rules the trust creator (the trustor) set. If you have a revocable living trust, understanding what a trustee does, and what your successor trustee will need to do, is one of the most important parts of your estate plan.
While the Trustor Is Alive
When you create a revocable living trust, you typically serve as both the trustor and the trustee. The assets belong to you and you can do whatever you want with them. You can buy, sell, invest, and spend just as you always have. Nothing changes in your daily life.
If you become incapacitated, your successor trustee steps up to manage the trust and its assets. Their job while the trustor is alive is straightforward: use the trust assets to take care of the trustor. This means paying bills, managing investments, and making sure the trustor's needs are met, all without going to court for a conservatorship.
After the Trustor Passes Away
After the trustor passes away, the successor trustee's job changes significantly. Now they must administer the trust, which includes several key responsibilities:
- Notify beneficiaries. Under A.R.S. 14-10813, the trustee must notify qualified beneficiaries within 60 days of accepting the role.
- Inventory and protect trust assets. The trustee must identify all assets in the trust, secure them, and get appraisals if needed.
- Pay debts, taxes, and expenses. The trustee is responsible for paying the trustor's final bills, filing tax returns, and covering any administration expenses.
- Distribute assets to beneficiaries. The trustee distributes assets exactly according to the terms of the trust. They do not get to decide who gets what. They follow the instructions.
- Keep detailed records. The trustee must track every transaction, keep receipts, and be prepared to provide an accounting to beneficiaries if requested.
The trustee does not make the rules. They cannot change the rules. They follow them.
Understanding the Key Trust Roles
There are three key roles in every trust, and understanding the difference between them matters:
- Trustor (also called grantor or settlor): The person who creates and funds the trust. They set the rules, choose the beneficiaries, and decide how assets are managed and distributed. For more on these terms, see our article on settlor vs. grantor.
- Trustee: The manager who follows the trustor's rules. During the trustor's lifetime, this is usually the trustor themselves.
- Successor trustee: The person who takes over management after the trustor passes or becomes unable to serve. This is the person who will handle the real work of trust administration.
What Makes a Good Trustee?
Choosing the right successor trustee is a decision that deserves careful thought. A good trustee should be:
- Trustworthy and reliable. They will have control over your family's financial future.
- Organized. Trust administration involves paperwork, deadlines, and record-keeping.
- Willing to serve. Being a trustee is a real responsibility. Make sure the person you choose is willing to take it on.
- Able to act impartially. If you have multiple beneficiaries, the trustee must treat everyone fairly according to the trust terms, even if there is family pressure to do otherwise.
Some families choose a professional trustee (like a bank or trust company) when the family dynamics are complicated or when no family member is willing or able to serve.
At RJP Estate Planning, we help Arizona families choose the right trustee and make sure the trust document gives that person clear, detailed instructions. At the end of the day, it is your plan, your assets, and your rules. The trustee's job is to carry them out.