What Are a Trustee's Duties in Michigan?
Updated: Mar 17, 2020
As part of this descriptive series, you’ll learn more about the definitions of some of the most important roles in creating and managing estate planning documents and strategies. This week, we’re covering the concept of trustee.
As with other states, the appointment of a trustee is primarily done such that this person is responsible for administering the terms of a trust.
This person has specific fiduciary duties or obligations to the beneficiaries of the trust that the trustee can be held accountable for, making it all the more important to install a competent and reliable person in this role.
These include the duty to administer the trust, a duty of loyalty, a duty of performance and care, a duty to keep accurate records and furnish accounts, duty to enforce claims on behalf of the trust and to defend the claims against the trust, a duty to pay taxes and expenses associated with the trust, a duty to take and maintain control of the trust property, and a duty to keep trust property separate from the trustee's individual property.
Furthermore, a trustee has to make trust property productive, furnish information to beneficiaries, follow the terms of the trust regarding beneficiary distributions, and exercise reasonable care and skill.
Given the complexities involved in administering a trust, the selection of who should serve in the role of trustee is vital. In many cases, an independent third party entity might be selected given the impartiality and reduced opportunity for conflict. The person selected to serve as a trustee in Michigan should have some form of legal or financial experience or feel relatively confident with all of the duties outlined.