Duties of a Trust Administrator

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A trust administrator takes care of trust assets for the benefit of the beneficiaries. The trust administrator may be either an individual or an organization such as a bank or specialist trust company. The trust deed sets out the specific duties of the trust administrator. In addition, the law imposes certain more general duties on anyone who administers a trust. If he fails to comply with his legal duties, the trust administrator could potentially become personally liable for any losses.

Assess the Value of the Assets

One of the first duties of a newly appointed trust administrator is to assess the value of the trust’s assets, after deducting any liabilities. This is important not just as a record-keeping exercise, but also to determine whether or not the trust is liable for tax. Trust administrators are responsible for paying all federal and state taxes. These vary according to the state where the trust is located, the value and complexity of the trust.

Good Faith

One of the paramount duties of a trust administrator is to act at all times in good faith and in the interests of the beneficiaries of the trust. This means that in practice he must act in an honest and transparent manner and disclose all or any personal gain that he might obtain from carrying out any transactions. The trust beneficiaries may sue a trust administrator for any losses suffered by the trust if he fails to comply with this duty.


As a matter of good practice, the trust administrator must keep good and accurate records of investments made, taxes paid and correspondence received. The beneficiaries may ask to see the trust accounts at any time and the trust administrator should be able to explain the transactions that he has made. Most trust deeds require the trustee to give an account of the trust funds on a six-monthly or annual basis.

Prudence and Fairness

A trust administrator will inevitably be involved in making investments and financial decisions. The law requires him to make those decisions prudently and not take risks with the trust funds. In practice, the trust administrator should therefore not invest in risky or speculative schemes. In addition, unless the trust deed specifies otherwise, a trust administrator must treat all beneficiaries fairly and equally so that he does not favor one over another.

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