A trustee is a legal term for a person, firm, or company who holds property, authority, or a position of trust for a third party, who is referred to as a beneficiary. In many cases, a trustee is a legal professional such as a lawyer. Trustees can be nominated for many different reasons, such as in cases of bankruptcy, charities, trust funds, and retirement or pension plans.
As the name implies, trustees are generally trusted to make good decisions on behalf of the beneficiary’s best interest. Usually, a trustee has a fiduciary responsibility, this means that they must act in the best interests of the beneficiary.
Trustees are generally responsible for the management of the beneficiaries’ assets. This can include funds, stocks and investments, and property at times. In cases in which a trustee oversees property or real estate, the trustee’s job will be to oversee those properties.
There are certain requirements and duties for trustees. They cannot be in a conflict of interest, must carry out the duties expressed in the terms of the trust, and be nonprofit although they may charge service fees to the trust. In addition to the above, they must be impartial in cases of multiple beneficiaries, defend the trust, and not delegate their responsibility.
In certain cases trustees may be required to pay tax on behalf of the trust, depending on the type of trust. This can include income tax, inheritance tax, capital gains tax, and property taxes.
The legal definition of trustee can vary slightly depending on the country in which they operate.