You've inherited a house. If you have been named the trustee of a trust or a will, you should feel
flattered. This means someone trusts you implicitly to make the proper decisions should something happen to them, especially as it relates to an inherited house. It is a vote of confidence like no other. What you do need to know, though, is that being named a trustee also comes with some serious responsibilities. You need to consider the weight of these responsibilities before you agree to be the trustee.
Following Term Directions
You will be responsible for making sure the trust or will is followed to the letter. It’s a good idea to read that trust or will now so that if you have any questions you can get them answered well before your responsibilities are called into action.
The trust is a road map and one must follow the directions, whether it's about when and how to distribute income and principle or what reports you need to make to beneficiaries.
You certainly don’t want to have questions or be confused by the paperwork when you have to act as the trustee. Then, you could find your responsibilities to be extremely hard to follow. How do you sell an inherited house? What is the process? This can be tough, too.
As the trustee, you will be given something called fiduciary responsibility. This means you are responsible for divvying out the monetary and/or property assets (such as the inherited house) to the beneficiaries after the holder of the will or trust has passed away. Because you will be responsible for something so important, you have to have a keen eye for the financial side. You cannot make a mistake. This responsibility is extremely heavy as you have to pay more attention to the investments, disbursements, and details more than you would your own finances.
If you are the trustee on a trust, then you may be given discretion to make distributions from that trust to the beneficiary. This is another big responsibility. You will need to evaluate the beneficiary’s needs, sources of income, and future before determining how much to distribute from the holdings. You may at times need to set limits or even say no when the beneficiary wants money.
You will have to be math-minded as well. You will be responsible for keeping track of income and distributions from the trust. You may also need to deal with tax issues. It can be a big headache and it requires that you keep track of everything in the smallest detail.
Before being named a trustee, you have to consider whether or not you are ready for this responsibility. It can be a lot to put on one person, and while this means someone trusts you very much, it may be more than you are willing to handle. Talk over the details before making a decision. Read the will or trust and make a list of all the assets (including real property, like an inherited house) Make sure you are ready for this before you sign on to be named the trustee. Remember that your responsibilities could last for many years in the future as well.