Estate Executor’s Guide – [Part 4] Long-Term Trustees

Estate Executor Guide Four Part Series – Part 4

In addition to fulfilling their duties as an executor, some wills require an executor or another appointed individual to serve as a trustee for an extended period. This role involves managing estate assets not just until distribution, but over the long term—sometimes spanning multiple generations. Understanding these responsibilities and the legal framework governing trustees is crucial for ensuring that the trust’s purpose is achieved and that beneficiaries’ interests are protected.

Executor as Trustee

• Every executor acts as a temporary trustee of estate assets until they are sold or distributed.
• Some wills create a testamentary trust, granting the trustee ongoing duties. For example, the trustee may manage a life estate—allowing a beneficiary to use property for their lifetime—after which the assets pass to residuary beneficiaries.
• Testamentary trusts may also grant discretionary or protective powers over certain assets, directing how capital and income should be managed for the beneficiaries’ long-term benefit.

Governing Laws and Duties

• Trustees operate under the will’s terms and are further regulated by the Trusts Act and general trust law principles.
• A trustee must act in the best interests of all beneficiaries, safeguarding their financial and legal interests. This includes:
  • Protecting and maintaining assets
  • Seeking appropriate income opportunities (e.g., renting out property, investing funds)
  • Avoiding financial detriment to the estate or trust
  • Continuing to perform all relevant executor responsibilities, as outlined in earlier parts of this guide

Long-Term Asset Management

• Since trusts can last for many years, effective asset and investment management is crucial.
• Trustees must ensure that properties are well-maintained and insured, and that investments remain suitable over time.
• Balancing the need for current maintenance and education expenses (e.g., for infant beneficiaries) with preserving the trust’s capital is key. The trust’s principal should remain intact or grow as intended by the will-maker, ensuring long-term objectives are met.

Professional Assistance and Non-Delegation of Powers

• Trustees generally cannot delegate their decision-making powers; however, they are encouraged to seek professional advice.
• Consider consulting with accountants, financial advisors, and solicitors—experts who can provide guidance on complex investment or tax issues.
• While decision-making authority cannot be handed over, experts can supply valuable recommendations, allowing trustees to make informed choices.

Practical Procedures for Long-Term Trustees
To maintain effective management, trustees might implement measures such as:

• Real Estate Management: Appointing a real estate agent to oversee property maintenance, collect rents, and handle leasing arrangements.
• Regular Inspections: Conducting half-yearly property inspections and receiving reports to track conditions and required upkeep.
• Accounting and Tax Compliance: Establishing a process for preparing annual accounts and lodging tax returns if needed.
• Review and Adjust Investments: Periodically reassessing the trust’s investment portfolio to ensure it remains aligned with beneficiaries’ needs and risk tolerance.

You have completed Part 4 of the Estate Executor’s Guide Four Part Series

• Go back to Part 1 – Estate Executor’s Guide – Getting Started
• Go back to  Part 2 – Estate Executor’s Guide – Administering The Estate
• Go back to   Part 3 – Estate Executor’s Guide – Court proceedings by and against executors and administrators

If at any time you need legal involvement in your administration, please call us on 1300 580 413.