Trustee

What it means

A trustee holds legal title to trust property but does not own it in any meaningful sense: it must be managed for the beneficiaries, according to the trust document.

The role carries a fiduciary duty — the highest standard the law asks of anyone acting for another — including duties of loyalty, prudence, impartiality between beneficiaries, and record-keeping.

A trustee may be a family member, a professional, or a bank's trust department. Many trusts name a family member and a professional successor.

Why it matters

A trustee's decisions are reviewable, and a trustee who mixes trust money with their own, or favors one beneficiary, can be personally liable.

Families frequently accept the role without knowing that it involves accounting to beneficiaries who may be siblings.

When you are likely to meet it

• When named as trustee in a parent's trust.
• When a bank asks for proof of trustee authority.
• When a trust has to be administered after a death.

How this varies by state

What a trustee must disclose to beneficiaries, and how often, is set by state law.

Related terms

• ABLE accountA savings account a disabled person can hold without losing means-tested benefits.
• Certificate of trustA short document proving a trust exists and what the trustee may do, without revealing its terms.
• Estate accountingA statement of everything that came into the estate and everything that went out, presented before the estate can be closed.
• FiduciaryAnybody who holds power over somebody else's money or decisions and is legally required to use it for them rather than for themselves.
• Fiduciary dutyThe obligation to act for somebody else's benefit rather than your own — and to be able to show you did.
• Funding a trustActually moving property into a trust — retitling accounts and deeds into its name. An unfunded trust generally does not control assets that were never transferred into it.
• GrantorThe person who creates a trust and puts property into it.
• Irrevocable trustA trust that generally cannot be changed or undone once created. Giving up control is the point of it.
• Legal and equitable titleOwnership split in two: one person holds the property, another holds the benefit of it.
• Pet trustA legal arrangement funding the care of an animal after its owner dies or can no longer look after it.
• Pour-over willA short will used alongside a living trust, directing anything left outside the trust into it.
• Revocable living trustA trust you create during your lifetime, keep control of, and can change or cancel at any time. Property held in it does not go through probate.
• Revised Uniform Fiduciary Access to Digital Assets ActThe law, adopted in most states, that gives an executor, trustee or agent a route to a person's digital accounts.
• Special needs trustA trust that holds money for a person with a disability without disqualifying them from means-tested benefits.
• Spendthrift clauseA term in a trust preventing a beneficiary from selling or pledging their interest, and preventing their creditors from reaching it.
• Successor trusteeThe person who takes over a trust when the original trustee dies, resigns, or can no longer serve.
• Terms of a trustNot the same as the trust document — the terms are what the person who created it meant, and evidence outside the paper can establish them.
• Testamentary trustA trust created by a will, coming into existence only when the person dies.
• UGMA and UTMA accountsCustodial accounts holding money for a child, which the child takes control of outright at an age set by state law.

Sahvelo guidance that uses this

• Trusts after a death
• Wills and trusts