Top 5 Mistakes New Trustees Make (And How to Avoid Them)

The role of a trustee is not just a title—it's a legal and spiritual duty.

Missteps can damage trust assets, break fiduciary duties, or expose the trustee to personal liability.

Mistake 1: Failing to Understand Fiduciary Duties

Trustees must act with loyalty, impartiality, and care.

Tip: Always keep trust goals and beneficiary interests as the compass.

Mistake 2: Commingling Personal and Trust Funds

Mixing trust assets with personal accounts is illegal and easy to do by accident.

Tip: Always use separate bank accounts, EINs, and accounting tools for trust transactions.

Mistake 3: Not Keeping Proper Records

Trusts are legal contracts; records must prove you acted in accordance with its terms.

Tip: Keep a trustee journal, meeting minutes, and all receipts.

Mistake 4: Distributing Assets Too Soon

Premature distributions can violate the terms of the trust and create tax problems.

Tip: Follow the letter of the trust and seek legal guidance if uncertain.

Mistake 5: Acting Outside the Scope of Authority

Some trustees try to "fix" things outside what’s authorized in the trust document.

Tip: Read the trust document as law, and seek a legal amendment if change is needed.

Conclusion:

Trusteeship is a high calling. Avoiding these 5 common mistakes protects not just the assets—but your reputation, your peace of mind, and your sacred duty.

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