When a loved one passes away and names you as the trustee of their estate, it’s an honor and a responsibility. Acting as a trustee is more than just a title; it comes with a fiduciary duty to manage the trust in the best interests of the beneficiaries. At Navalign, we have extensive experience serving as fiduciary financial advisors and helping clients manage trust administration. We’ve been named as successor trustees in some of our clients’ estate plans, so we understand the complexity involved. But for the everyday person—perhaps a child, sibling, or close friend—this role can feel overwhelming.

This guide breaks down the core responsibilities of administering an estate and provides helpful insights for those navigating the complexities of trust administration for the first time.

What Does It Mean to Be a Trustee?

A trustee is the individual or institution named in a trust document to manage and distribute the trust’s assets according to the grantor’s wishes. The grantor is the person who created the trust. Trustees have a legal obligation, a fiduciary duty, to act in the best interest of the trust’s beneficiaries.

This means:

• Acting in good faith
• Avoiding conflicts of interest
• Keeping trust assets separate from personal finances
• Providing transparency and accurate records
• Following the terms of the trust precisely

Even with the best intentions, it’s easy to make mistakes. That’s why working with professionals such as fiduciary wealth managers, accountants, or estate attorneys can provide much-needed support and peace of mind.

Key Responsibilities of a Trustee

1. Understand the Trust Document

The first and most important step is to read and understand the trust document. This legal document outlines:

• Who the beneficiaries are
• What assets are held in the trust
• How and when distributions should be made
• Any special instructions, such as staged distributions or discretionary provisions

A trust may include distribution rules such as:

• 1/3 of the estate at age 30
• 1/2 at age 35
• The remaining portion at age 40

These rules must be followed precisely, and it’s the trustee’s job to make sure they’re enforced—even if it creates tension with family members.

2. Maintain Accurate Records and Trust Accounting

One of the most critical responsibilities of a trustee is keeping detailed records and preparing trust accounting. If the trust includes investments or regular distributions, you’ll need to document every transaction, including:

• Income received (dividends, interest, rent, etc.)
• Expenses paid (taxes, fees, maintenance, etc.)
• Distributions to beneficiaries
• Gains or losses on investments

This is where many first-time trustees run into trouble. Keeping informal or incomplete records can lead to disputes or even legal action. We recommend hiring a qualified accountant or professional fiduciary to assist with formal trust accounting.

3. Communicate with Beneficiaries

Being a trustee means communicating clearly, consistently, and transparently. You should:

• Notify beneficiaries of their rights and entitlements
• Provide regular updates on the trust’s status
• Share accounting summaries or financial statements annually

Even if you’re managing a trust for a sibling, niece, or nephew, it’s important to approach these communications professionally and impartially.

The Emotional Challenges of Administering a Family Trust

Administering a trust can be particularly challenging when family is involved. In some situations grantors (typically parents) want to ensure their children don’t receive their inheritance all at once. Instead, they structure staged distributions or include discretionary clauses, such as a HEMS provision.

What is a HEMS Provision?

A HEMS clause allows the trustee to make distributions for the health, education, maintenance, or support of a beneficiary. These are subjective terms and can be difficult to interpret. For example:

• Does a yoga retreat qualify as “health”?
• Is a private school abroad covered under “education”?
• What counts as “support” if a beneficiary isn’t working?

The trustee must use their discretion and be able to justify decisions—especially if other beneficiaries might question them.

Having a clear, impartial party involved, like a professional fiduciary or corporate trustee, can help ensure these decisions are handled fairly and without emotional bias.

Common Mistakes First-Time Trustees Make

Even with the best intentions, inexperienced trustees can make costly errors. Here are some common pitfalls:

• Delaying asset distribution due to confusion or fear of making a mistake
• Failing to file necessary tax returns or pay taxes on time
• Mixing personal and trust finances
• Making loans or gifts to certain beneficiaries without authorization
• Not keeping detailed financial records

Trustees who make these mistakes, even unintentionally, can be held legally liable by the beneficiaries. That’s why it’s so important to seek guidance from professionals.

When to Consider a Professional Trustee

Administering a trust can be a long-term responsibility—sometimes lasting decades. In situations where beneficiaries are young, disabled, or receiving distributions over time, it may be best to name a corporate trustee or professional fiduciary.

Advantages of working with a professional trustee:

• Experience and expertise in managing complex estates and investments
• Neutrality, avoiding emotional conflicts or family disputes
• Efficient administration, including trust accounting, tax filings, and investment oversight
• Consistency, especially for long-term trusts with staggered distributions

At Navalign, we serve in this role for many clients who trust us to handle their estate in a professional, compassionate, and compliant manner.

You’re Not Alone

Taking on the role of trustee for a loved one’s estate is a serious commitment. It’s an act of trust, love, and responsibility. But it can also be stressful, complicated, and time-consuming, especially when you’re not a financial professional.

You don’t have to do it alone.

Navalign offers fiduciary wealth management and trust administration services, providing expert guidance and high-touch personal service. Whether you’re looking for help managing a trust today or planning your own estate, we’re here to support you with clarity and care.

Interested in learning more?

If you’ve been named trustee or are planning your estate and want to ensure your legacy is handled professionally, contact Navalign today to schedule a consultation. Let us show you how working with a fiduciary financial advisor can simplify the complexities of trust administration and provide peace of mind for you and your family.