Serving as a trustee can feel like an honor—but it’s also a big responsibility. You’re managing money, legal documents, and people’s expectations, all while trying to follow the trust’s instructions to the letter. If you make a mistake, you could be held personally responsible.
That’s why it’s so important to work with a Minneapolis trust lawyer if you’ve been named as a trustee or are considering taking on the role.
Below are some of the most common trustee mistakes we see at Stone Arch Law Office—and how to avoid them.
Misinterpreting Trust Terms
Most trusts are written in legal language, sometimes called “legalese.” These terms are often meant for courts, not everyday readers. Misunderstanding just one of these terms could lead to a costly error.
Best practice: Read the full trust document and go over it with an estate planning attorney. A qualified professional can explain confusing sections and make sure you understand important details—like distribution rules, powers granted to the trustee, or specific deadlines triggered by the beneficiary’s age.
How Important Are Deadlines and Taxes?
Extremely important. One of the biggest traps for new trustees is missing a filing deadline. This could include tax filings, notices to creditors, or court documents—each with strict due dates. Missing any of them could result in interest charges, penalties, or personal liability.
Best practice: Keep a calendar and work with a legal or financial advisor who can help you stay on top of everything. A Minneapolis trust lawyer can also file documents on your behalf to ensure nothing slips through the cracks.
Why Is Managing Beneficiaries So Challenging?
Even when families are close, money can add stress. Beneficiaries may be anxious about distributions, especially when they’re experiencing financial hardship or don’t fully understand how the trust process works.
Best practice: Be transparent and communicate early. Let beneficiaries know the timeline, any expected delays, and what documents they can expect to receive. Providing updates—even when there’s no new activity—can help avoid tension.
What Happens If You Make a Financial Mistake as a Trustee?
One of the biggest risks for trustees is personal liability. If you distribute money too early or overlook a debt or creditor claim, you might have to pay it back out of your own pocket. That’s a major risk, especially if the beneficiaries have already spent the money.
Best practice: Work closely with a legal advisor to make sure the estate is settled properly before making distributions. This includes reviewing the deceased’s financial records, paying off debts, filing taxes, and documenting every financial move. Read more on estate planning in our article, What Is an Estate Inventory?
How a Minneapolis Trust Lawyer Helps Guide Trustees
No one expects you to know everything about trust administration. In fact, one of the best things you can do is build a team of professionals—an attorney, a tax accountant, and an investment advisor—to guide you.
A Minneapolis trust lawyer can help with:
- Reading and interpreting the trust document
- Handling legal filings and court notices
- Ensuring tax documents are filed properly
- Avoiding conflicts with beneficiaries
- Reducing the risk of personal liability
- Preparing and tracking required financial reports
Ready to Get Support?
If you’re feeling overwhelmed or unsure about your duties as a trustee, you’re not alone. At Stone Arch Law Office, we work with trustees throughout Minnesota to make sure everything is handled clearly, carefully, and in line with the law. Book a call with our office to learn how we can help you create your trust and choose a trustee or if you are a newly appointed trustee and need help navigating the process.
Reference: Forbes (May 31, 2022) “How To Be An Effective Trustee”
