The trustee, who is bound by several legal requirements, manages a trust. For a living trust, the trustee is often the person who originally created the trust, known as the grantor or settlor. Trusts operate under state law, which varies. The American Bar Association endorses the Uniform Trust Code, which is enacted in 23 states and being considered for adoption by three more as of March 2012. The UTC is a good framework, but you should review the laws of your state prior to undertaking the responsibility of being a trustee.
Confirm the purpose of the trust is lawful, not contrary to public policy and possible to achieve. These standards must be met, regardless of what the declaration of trust states. An example of an illegal trust is one that is created for the purpose of defrauding a creditor. Examples of trust provisions that are against public policy are those that promote divorce or prevent a beneficiary from marrying.
Comply with the trustee’s obligations as established by the creator of the trust. Generally, the terms of the trust define the rights and responsibilities of the trustee in managing the trust. The terms of the trust are contained in the “declaration of trust,” which is drafted when the trust is created. Typically, the trustee must ensure the assets of the trust are maintained; money and assets in the trust are available for the beneficiaries, who are those who will receive money from the trust. Beneficiaries can include grantors, trustees, family or charities – whomever the grantor named in the trust.
Consider altering the trust agreement if the trust is revocable. A revocable living trust allows the creator of the trust to change the terms of the trust at any time. If you are both the trust’s creator and trustee and find managing the trust, as established, too difficult, you can change the terms to make managing the trust easier.