The Ultimate Trustee Checklist, Step By Step

Whether you’re managing a modest trust for a family member or overseeing a large estate, your responsibilities as a trustee are the same. You act in the best interests of the beneficiaries and carry out the instructions laid out in the trust document. To help, here’s a comprehensive trustee checklist to guide you through every responsibility. It breaks them down step-by-step—from asset management to beneficiary communication.

Trustee Checklist—Main Steps

Step 1—Start by reviewing the trust from beginning to end. Know who created the trust (the grantor), who benefits from it (the beneficiaries), and what the instructions are.

Example: If the trust says the family cabin is to be maintained until the youngest grandchild turns 25, you’re obligated to follow that rule—even if the other grandkids want to sell it early.

Step 2—Next, obtain certified copies of the trust and death certificate (if applicable). You’ll need these to gain access to financial accounts, transfer property titles, and conduct other trust business.

Financial and Legal Duties

Step 3—Apply for an Employer Identification Number (EIN). A trust needs an EIN from the IRS to open bank accounts or file taxes. Even if the trust already has one, make sure it’s active and up to date.

Step 4—Transfer assets into the trust, if it hasn’t been done already. This includes retitling bank accounts, investment portfolios, and real estate to the name of the trust. If something is still in the grantor’s name, you may need help transferring it.

Example: If the trust owns a rental property, ensure the deed reflects the trust’s ownership before collecting rent or paying expenses from a trust account.

Step 5—Set up a dedicated trust bank account. Don’t co-mingle personal and trust funds. Open a bank account solely for the trust to handle income, distributions, and expenses.

Inventory and Valuation

Step 6—Take an inventory of trust assets. List everything the trust owns, which might include:

• Real estate
• Bank accounts
• Stocks and bonds
• Personal property (like jewelry or art)
• Digital assets (such as domain names or cryptocurrency)

Step 7—Obtain asset valuations. For real estate, hire a professional appraiser. For investments, get statements as of the date the grantor passed. Accurate valuations are essential for taxes and fair distributions.

Notifications and Communication

Step 8—Notify beneficiaries. Beneficiaries have a right to know they’re named in a trust. Provide a copy of the trust (or a summary if allowed) and inform them of the general timeline and process.

Example: If the trust stipulates quarterly distributions to an adult child, they should be informed how and when to expect them.

Step 9—Contact financial institutions and creditors. Let banks, insurers, and investment firms know about your role as trustee. Also, alert any known creditors of the trust.

Trustee Checklist—Administration and Ongoing Duties

Step 10—Pay outstanding debts and expenses. Before making distributions, use trust funds to settle debts, taxes, and administrative expenses.

Example: If the trust owns a home with a mortgage, property taxes and insurance premiums must still be paid on time.

Step 11—File taxes for the trust. Trusts have their own tax filing requirements. You may need to file:

• A final individual income tax return for the grantor
• An income tax return for the trust (IRS Form 1041)

Step 12—Keep detailed records. Document every transaction: income received, bills paid, distributions made. Keep receipts and use accounting software or a spreadsheet to stay organized.

Distributions and Termination

Step 13—Follow distribution instructions carefully. Only distribute assets according to the trust’s terms. Some trusts allow lump sums; others restrict usage (e.g., for education or healthcare).

Example: If the trust says a grandchild receives $10,000 upon graduating from college, request proof of graduation before releasing funds.

Step 14—Prepare a final accounting. Before dissolving the trust, prepare a full accounting for beneficiaries. This includes:

• Beginning trust value
• Income received
• Expenses paid
• Final distributions

Some states require beneficiaries to sign off on this document before the trust can close.

Step 15—Distribute remaining assets and close the trust. Once all conditions are met and all obligations are settled, distribute the remaining assets and close the trust accounts.

Bonus Section—Best Practices

Stay Neutral—Don’t favor one beneficiary over another, even if you’re related to them. This protects you from claims of bias or mismanagement.

Keep Things Transparent—Beneficiaries can get suspicious if they feel left in the dark. Regular updates build trust and help prevent disputes.

Know When to Ask for Help—Some tasks, like filing taxes or valuing real estate, are best handled by professionals. Delegating these doesn’t mean you’re not doing your job; it means you’re doing it wisely.

The Ultimate Trustee Checklist, Summed Up

Managing a trust isn’t just about handling money. It’s about honoring someone’s legacy, protecting assets, and acting with care and integrity. Whether you’re new to the role or reviewing your process, this trustee checklist helps ensure nothing slips through the cracks.

And remember: the most successful trustees treat the role like a marathon, not a sprint. Take your time, document everything, and lead with fairness and transparency.