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The responsibilities of a trustee

Understanding the duties of a trustee may help New Jersey residents who are creating an estate plan that includes a trust select the right person for this job. A trustee is the person who is responsible for overseeing the trust. Managing the trust, investing the assets that are in the trust and distributing assets to beneficiaries are all responsibilities of the trustee.

In managing a trust, a trustee must be aware of state and federal laws regarding the trust and must keep accurate records. Trustees are responsible for filing tax returns on behalf of the trust and paying any taxes that are owed. Trustees also invest assets. How these assets are invested depends on the goal of the beneficiaries.

The trust will have instructions as to how distributions are supposed to be made to beneficiaries. The trustee is required to follow these instructions.

Distributions may happen in a wide range of ways depending on the purpose of the trust. For example, a trust may be set up so that distributions only occur at certain times or at the discretion of the trustee. This may be the case if the creator of the trust considered the beneficiary irresponsible. Distributions might be tied to certain milestones such as the beneficiary reaching a certain age or educational achievement. If the trust is a special needs trust, then distributions may not go directly to the beneficiary but may be used to pay the beneficiary's rent or in other ways. Given the duties of a trustee, it is important to select someone who is responsible and well-organized and able to deal with conflict if necessary. A trustee may be a friend, a relative or a professional such as a attorney.

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Lanza & Lanza LLP
5 Main Street
Flemington, NJ 08822

Phone: 908-905-0183
Fax: 908-782-4012
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