What Is the Role of a Trustee in a Revocable Living Trust?
A revocable living trust is a common Washington estate planning tool used to hold and manage certain assets. The person who creates the trust is known as the settlor or grantor. The settlor funds the trust by transferring legal title to the assets to a trustee. The trustee then administers the trust assets for the benefit of one or more beneficiaries.
In most Washington revocable living trusts, the settlor, trustee, and beneficiary are often the same person, at least initially. Basically, if you create a living trust, you can use it to manage your assets for your own benefit while you are still alive. But should you die, become incapacitated, or simply want someone else to take over running the trust during your lifetime, you can designate someone else to serve as your trustee.
So, what exactly is the role of a trustee in this situation? Put another way, what is the trustee allowed to do–or not do–when it comes to managing the assets you have placed in trust. And what can you do if you are dissatisfied with how the trustee is running things?
Trustees and Fiduciary Duties
A trustee is considered a fiduciary under Washington law. In plain terms, the trustee must manage any trust assets for the benefit of the beneficiaries named in the trust document. If you are the beneficiary during your lifetime, that means the trustee must always act in your best interest and not allow their personal interests to interfere. For example, the trustee should never co-mingle their personal assets with those of the trust.
The trustee must also keep good records of any trust activities. This includes keeping a detailed list of any assets, liabilities, income, and expenses. There should never be any “missing” or unaccounted for property in a trust. The trustee must also exercise reasonable care when it comes to managing the trust’s property. For instance, if the trust assets include real estate, the trustee must take care to ensure the property taxes are paid on time each year. A trustee who fails in any of these duties can be held personally liable to the trust’s beneficiaries.
Changes to the Trust
A revocable living trust is designed to be a flexible estate planning tool. This means that as the grantor, you have the right to amend or outright revoke the trust at any point during your lifetime. This includes adding to or removing property from the trust, as well as making amendments or changes to the underlying trust document. You also have the right to remove the trustee altogether and appoint someone else in their place.
As a general rule, your trustee does not have the right to amend or change your trust without your consent or by specific authorization in your trust or power of attorney. And once you die, the terms of the trust become irrevocable under Washington law. So, your trustee is still bound by your instructions even after you are gone.
Contact a Spokane Trusts Lawyer Today
Administering a revocable living trust is a serious undertaking that requires a clear understanding of the trustee’s rights and responsibilities. A qualified Spokane trusts lawyer can offer you invaluable legal advice and guidance in this area. Contact Moulton Law Offices, P.S., today to schedule a free consultation. We serve clients throughout the Spokane Valley, Kennewick, and Yakima area.
