Above all else, an independent trustee has a fiduciary duty first to the decedent, then to the beneficiaries and the estate as an entirety. The trustee is charged with protecting and defending the estate against mismanagement, improper claims and fraud, while still being prudent with investments and other interests maintained on the estate’s behalf. An obligation unique to the independent trustee is the duty not to appoint any person or entity to assume responsibility for any of the trustee’s tasks. The independent trustee must handle every task himself and seek approval from the court and, if applicable, all co-trustees assigned to the estate.
Managing Cash Assets
One of the primary duties of the trustee is to manage the estate’s liquid assets, including bank accounts, investments and other interests. Upon appointment, the trustee should review and account for all cash assets listed by the will, establish a record of any assets not explicitly described in the will and “balance” the amounts using prior accounting records and receipts. Afterward, the trustee is responsible for recording all deposits, including dates, times, locations, amounts and the source of the income, in addition to the dates, times, amounts and reasons for each withdrawal. Depending on the instructions provided by the particular court, the trustee must furnish a copy of these records on a regular basis -- usually, once every three to four months and any time a legitimate question arises regarding expenditures.
As the administrators are entitled to use the estate’s resources to cover the estate’s expenses, the trustee is responsible for disbursing funds upon the administrators’ request. In general, the administrator must make a written request detailing the amount needed and the reasons why. The trustee must then either disburse the money or provide a reason for denying the request. The trustee must be diligent in handling these requests, as the trustee may be subject to reprimand, punishment or even personal liability for continually mismanaging the estate’s funds.
While the court administers the remainder of the estate, the trustee typically assumes responsibility for dividing the assets among the beneficiaries, particularly in matters where the court appoints an independent trustee to oversee the administrator’s activities in response to suspected mismanaging or misappropriation. If a will exists, the trustee divides the assets among the beneficiaries according to the instructions therein. Otherwise, the court determines who shall inherit what, in which case the trustee is merely responsible for turning over physical possession or control to the beneficiary. Once the estate is officially resolved, the court releases the trustee from duty and the trustee has no additional obligations to the estate.