The Role of a Trustee in Missouri: What You Need to Know Before You Appoint One

The Role of a Trustee in Missouri: What You Need to Know Before You Appoint One

If you're creating a trust as part of your Missouri estate plan, one of the most important decisions you'll make is choosing your trustee. The trustee is the person (or institution) responsible for managing the trust assets and carrying out your wishes after you're gone or if you become incapacitated. It's a role that carries significant legal responsibility, and getting the choice right makes all the difference.

At The Taormina Firm, we help families across the St. Louis area, from Des Peres and Brentwood to Chesterfield and St. Charles, understand the trustee's role and make smart choices about who should fill it.

What Does a Trustee Do?

A trustee's duties are extensive. At the most basic level, the trustee is responsible for managing and protecting trust assets according to the terms of the trust document, making distributions to beneficiaries as directed by the trust, keeping accurate records of all trust transactions, filing trust tax returns, communicating with beneficiaries about the trust's status, and acting in the best interests of the beneficiaries at all times.

Under Missouri's Uniform Trust Code (Chapter 456), trustees have a fiduciary duty to the trust's beneficiaries. This means they must act with the utmost good faith, loyalty, and care. A trustee who breaches this duty can be held personally liable for any resulting losses.

Types of Trustees

There are generally three types of trustees to consider.

An individual trustee is a person you know and trust, such as a family member, friend, or trusted advisor. The advantage is that they know you and your family personally. The disadvantage is that they may lack financial or legal expertise, and serving as trustee can be a significant time commitment.

A corporate or institutional trustee is a bank, trust company, or financial institution that professionally manages trusts. They bring expertise, continuity (they won't die or become incapacitated), and impartiality. The trade-off is higher fees and a potentially less personal relationship with your beneficiaries.

A co-trustee arrangement combines both: you name an individual trustee who knows your family alongside a corporate trustee that handles the financial and administrative duties. This can offer the best of both worlds, though it requires clear documentation about how decisions are shared.

Choosing the Right Person

If you're choosing an individual trustee, look for someone who is trustworthy and honest, financially responsible, organized and detail-oriented, willing to seek professional help when needed, and available and geographically accessible. Many families in the St. Louis area choose a spouse, adult child, or close sibling. But it's important to think about whether that person truly has the temperament and ability to handle the role, especially if there are complex family dynamics or significant assets involved.

The Importance of Naming a Successor Trustee

No matter who you choose as your initial trustee, always name at least one successor trustee. If your trustee dies, becomes incapacitated, resigns, or is unable to serve for any reason, the successor steps in. Without a successor named in the trust document, the court may need to appoint one, which adds time, cost, and uncertainty.

Trustee Compensation

Under Missouri law, trustees are entitled to reasonable compensation for their services. For corporate trustees, this is typically a percentage of the trust assets charged annually. For individual trustees, compensation is often addressed in the trust document itself. Many individual trustees, especially family members, choose to serve without compensation. But if the trust is large or complex, paying your trustee a fair fee helps ensure they take the role seriously and have an incentive to do the job well.

What Happens If a Trustee Mismanages the Trust?

Missouri law provides remedies for beneficiaries if a trustee fails in their duties. Under the Missouri Uniform Trust Code, beneficiaries can petition the court to compel a trustee to perform their duties, remove a trustee for breach of trust, and seek damages for losses caused by a trustee's mismanagement. This is why choosing a trustee you trust, and clearly defining their powers and obligations in the trust document, is so critical.

Should You Serve as Your Own Trustee?

With a revocable living trust, most people serve as their own trustee during their lifetime. This means you maintain full control over your assets while you're alive and competent. Your successor trustee only steps in if you become incapacitated or pass away. This is the arrangement we typically recommend at The Taormina Firm, and it's the setup most of our clients in Kirkwood, Maryland Heights, Sunset Hills, and across the region prefer.

Make a Smart Choice for Your Family

Choosing a trustee isn't a decision to take lightly. The right trustee ensures your wishes are carried out, your beneficiaries are taken care of, and your assets are managed responsibly. If you're creating or updating a trust and need guidance on choosing a trustee, contact The Taormina Firm. We'll help you think through the options and make the choice that's right for your family.