A trustee service is an individual, bank, or corporation contracted to administer property for the owner or a designated third party. Hired by the owner, or designated by the courts, the service performs certain duties for the owners of the property. The service is in a position of special confidence. Laws require the service to have certain qualifications, perform certain duties, and report back to the beneficiary. The service is usually paid for by the person who set up the trust or through the trust’s funds.
A trust is a corporation or individual holding a property on behalf of the owner or a beneficiary. The owner of the trust might be the person who owns the properties or holds the title to a property. A beneficiary is the person designated by the property owner to receive the benefits or income from the trust. The trustee service administers the funds of the trust to the beneficiary.
Corporations administering trusts must be qualified to do so, and they have certain obligations to the client usually determined by state or federal laws. Any service hired to administer the property on behalf of another has a fiduciary duty, or legal responsibility, to the beneficiaries. Since the service administers and invests funds on behalf of a beneficiary, they must have knowledge in finance and investing. A trustee service is required by law to inform the beneficiary of all matters relating to the trust and must keep these matters confidential.
The service is contracted to perform certain duties on behalf of the beneficiary. A trustee service is bound, within the confines of the law, to act in the best interest of the owners and the beneficiaries. Through a contractual agreement, the service is required to fulfill the terms of the trust as designated by the client or the courts. The service must administer property to the beneficiary in the manner stipulated by the contract, adhere to investment guidelines, and invest the property wisely on behalf of the beneficiary.
There are considerable tax advantages in setting up trusts, and investment purposes are one of the many reasons a person may want to use a trustee service. Another common reason for setting up trusts is to protect the property or investment from an incompetent, immature beneficiary or from a person who may squander the property. The service is hired, on behalf of persons such as these, to protect the investment and to ensure the beneficiary receives the benefit of the trust. Sometimes a court will appoint a trustee service to manage the accounts of a person filing bankruptcy, and the service is paid from public funds.