What is a trustee?

The word "trustee" sounds formal, like something from a bank lobby. In practice it is a job: someone holds the money and property in a trust and looks after it, following the instructions you wrote. If you have a living trust, you are probably the trustee today.

The question is who does that job when you can't, or after you die. This post explains what a trustee is, what the law requires of one, and how the role passes from you to the next person. It is part of our guide to the four roles in every estate plan, where the trustee sits alongside the executor and two powers of attorney.

What is a trustee, in plain words?

A trust has three parts. There is the person who creates it (Washington law calls this person the "trustor"; you may also see "grantor" or "settlor"). There is the trustee, who holds and manages the property. And there are the beneficiaries, who benefit from it.

The trustee is the one with the keys. The house deed and the brokerage account are titled in the trustee's name, as trustee of the trust. The Consumer Financial Protection Bureau's guide for trustees puts the point simply: a trustee can be an individual or a financial institution, and has authority only over property actually moved into the trust (CFPB).

So a trustee doesn't control everything you own. A car still in your name, or a retirement account with its own beneficiary form, sits outside the trustee's reach. That is why the trust is usually paired with a pour-over will to catch anything left out.

What is a trustee responsible for?

A trustee is a fiduciary, which means legally required to act in your interest and follow what you wrote. The duties come from state law and from the trust document itself. In Washington, most of them are in chapter 11.98 of the Revised Code of Washington.

Here are the core duties, with Washington's rule as the worked example:

The CFPB guide adds two practical duties that every good trustee follows. Keep trust property separate from your own, and keep good records, down to the receipt for groceries (CFPB). Its short version of the whole job: "It's not your money."

Washington takes conflicts seriously. A deal between the trust and the trustee's spouse, children, siblings or parents is presumed to be affected by a conflict of interest, unless the trustee shows it didn't hurt the beneficiaries (RCW 11.98.078).

What a trustee actually does

The legal duties turn into ordinary tasks. A trustee might:

• Pay the property tax and the electric bill from the trust account.
• Keep the house repaired, safe and checked on.
• Watch the investments and move money when bills come due.
• Answer a bank's questions, often by showing a short summary of the trust instead of the whole document.
• After a death, gather the property, pay final bills and hand it out as the trust directs.

On that fourth point, Washington lets a trustee give third parties a "certification of trust." It confirms the trust exists, who the trustee is and what powers the trustee has, without revealing who inherits (RCW 11.98.075).

How does the role pass from you to a successor trustee?

With a revocable living trust, you usually name yourself as the first trustee. Nothing changes day to day: you still sign checks and sell the car if you want. You also name a successor trustee to step in if you become unable to manage, and after you die.

In Washington, a successor trustee named in the trust document who is willing to serve is entitled to act, except for good cause or disqualification. Notice of the change goes to the beneficiaries currently eligible for distributions (RCW 11.98.039). In most cases that means no court hearing to start.

While you are living, a revocable trust's trustee owes duties only to you, the trustor (RCW 11.103.040). Other beneficiaries have no right to information about it until then (RCW 11.98.072). Your plans stay yours.

Our post on what a successor trustee does walks through the work after incapacity or death, step by step.

Can someone say no?

Yes. Being named is not the same as agreeing. In Washington, a person named as trustee can decline in writing before accepting (RCW 11.98.017).

That is why it helps to ask first, and to name a backup. If the first choice can't serve and no backup is named, the people with an interest in the trust have to agree on a replacement, or ask a court (RCW 11.98.039). Our post on naming a backup in every role covers how to set the order.

Who can be a trustee?

Almost any responsible adult can serve, and so can a trust company. People usually choose among a few options:

Here is a typical case, a composite. Margaret names her niece as successor trustee, with a trust company as backup. Her niece lives two states away and has young children, so Margaret wanted someone ready if the niece ever has to step back.

Our comparison of a corporate trustee and an individual trustee goes deeper on the trade-offs. If you're unsure whether anyone in your circle fits, the guide to who decides for you when you can't explains what happens when a role is left blank.

Kinly members can name Trella Trust Company, a Washington State chartered trust company, as trustee, either first or as backup to a person they choose. You set the order; the trust company follows what you wrote.

Is a trustee the same as an executor?

No, though one person can hold both roles. An executor settles what passes under your will, usually through probate. A trustee manages what is in the trust, often with no court involved.

A trustee's job can also start while you are living, if you become unable to manage. An executor's job starts only after death. Our post on executor vs trustee sets the two side by side.

Common questions

Can I be the trustee of my own trust?

Yes. With a revocable living trust you are usually the first trustee and the main beneficiary while you're living. Washington does require that the same person not be the sole trustee and the sole beneficiary of a trust (RCW 11.98.011). A living trust meets this because it names other beneficiaries who receive the property after you.

Does a trustee get paid?

A trustee may be paid if the trust document or state law allows it, and the fee must be reasonable. The CFPB guide tells family trustees not to pay themselves unless the trust or state law permits it, and to record their time if they do. Trust companies charge for their work; see our post on trust company fees.

Can a trustee do whatever they want with the money?

No. A trustee must follow the trust's terms and manage the property solely for the beneficiaries. In Washington, a deal that benefits the trustee personally can be undone by an affected beneficiary (RCW 11.98.078).

What is the difference between a trustee and a beneficiary?

The trustee manages the property; the beneficiary benefits from it. With a living trust you are often both while you're living. After you die, the successor trustee manages and distributes the property to the beneficiaries you named.

Sources

• RCW 11.98.078: Trustee duty of loyalty (Washington State Legislature)
• RCW 11.98.072: Trustee notification requirements (Washington State Legislature)
• RCW 11.98.075: Certification of trust (Washington State Legislature)
• RCW 11.98.039: Change of trustee, successor trustee (Washington State Legislature)
• RCW 11.98.017: Accepting and declining a trusteeship (Washington State Legislature)
• RCW 11.98.011: Trust creation requirements (Washington State Legislature)
• RCW 11.100.020: Management of trust assets by fiduciary (Washington State Legislature)
• RCW 11.103.040: Trustor's powers under a revocable trust (Washington State Legislature)
• Managing someone else's money: Help for trustees under a revocable living trust (Consumer Financial Protection Bureau)