An individual or financial institution with trust powers (one who manages a trust), that acts in a fiduciary capacity for the benefit of the assetholders in enforcing the terms of the trust indenture.

The person who manages a trust, the trustee, has a legal duty to manage the trust's assets in the best interests of the beneficiary or beneficiaries. Typical trustee duties include managing rental properties, investing funds or paying income to the beneficiary.

How much a trustee is required to do and how much access he or she has to the funds should be specified in the trust. A simple or mandatory trust requires the trustee to distribute income to the beneficiary. A complex or discretionary trust may afford the trustee discretion over the principal and income to be distributed.

Generally, trustees are paid for their services because of the amount of work involved in managing a trust and the threat of potential liability if assets are mismanaged. It is advisable to agree in advance upon how much a trustee is to be paid.

Last updated on May 14, 2009 by Jack Parsons