What Is a Trustee’s Role in Making Property Productive?

When you create a revocable trust, you are likely the trustee for the property placed inside so long as you are alive and capable of managing it. But if you pass away or if you create an irrevocable trust, you’ll want the help of a dedicated Pasadena estate planning lawyer to help you name the right trustee.

A trustee must serve the interests of the trust terms and the beneficiaries. There are several different duties associated with this, including the duty to make property productive. The trustee needs to use their skill and care to ensure that trust property is productive. This means that it produces income to meet the needs of income beneficiaries as well as enhancing the amount of principle for remainder beneficiaries.

Due to the duty of impartiality also held by trustees, the trustee must balance the interests of these two different sets who have unique interests. A trustee cannot leave funds uninvested if those assets do have the potential to earn a return. This also applies to estate executors who find cash in the estate as well as real estate assets that are held during the period of estate administration. What it actually means to make trust assets productive means different things to different people.

The trustee cannot invest only in property that appreciates in value but produces no income or direct all trust property into assets with a high yield. The trust assets need to generate reasonable growth of principle and income at the same time because the assets cannot be void of capital growth and income within a trust. A trustee who leaves money uninvested for a long period of time could be held responsible for doing so. Make sure that you consult with an experienced estate planning or trust administration lawyer if you have more questions about this process.

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