Survey: Nearly half of Americans say their top financial priority is getting caught up or staying current on bills
About 46 percent of Americans name paying bills as their top priority.
Trustee is a legal and financial term, but do you know what it is? Bankrate explains.
A person or firm that administers assets on behalf of a third party is called a trustee. Trustees oversee several different types of financial situations, including trusts, bankruptcies and certain types of pensions or retirement plans. It is the trustee’s job to make the best possible decisions for beneficiaries, those who benefit from the property or assets over which the trustee is in charge.
In order to understand the job of a trustee, it helps to review what a trust is. A trust is a legal document that acts as an entity of its own. It can hold property and assets, and it includes instructions regarding whom you want to oversee your affairs and where you want your assets to go when you die.
The trustee is the person or firm that manages the resources in the trust. Many people act as their own trustee for as long as they are mentally able, and if they are married they will normally hand off the job to their spouse when they can no longer manage it. If there is no spouse or the spouse is unable to act as a trustee, a successor trustee will be named to manage the trust.
A trustee is obligated to follow certain rules. The trustee must:
There is a bankruptcy trustee named in nearly every individual bankruptcy case. Trustee duties vary depending on whether the bankruptcy case falls under Chapter 7 or Chapter 13, the two most common types of personal bankruptcy.
There is a bankruptcy estate created whenever someone files for bankruptcy. Like a trust, the estate acts as its own legal entity and comprises the debtor’s property. A trustee oversees the estate, carries out duties as outlined by bankruptcy law, and acts in the best interest of creditors.
Chapter 7 bankruptcy is considered a “liquidation” due to the fact that a debtor’s possessions can be sold to help recoup creditors’ losses. For this reason, a trustee in a Chapter 7 case must:
Often referred to as “reorganization,” Chapter 13 bankruptcy requires that debtors come up with a plan to repay their creditors within three to five years. A trustee according to Chapter 13 will:
While overseeing a qualified retirement plan, a trustee must:
Regardless of the type of estate he or she oversees, a trustee’s primary duty is to the beneficiaries of the trust. Failure to adhere to this primary duty can lead to a trustee being removed and replaced for mismanagement.