What is a Trustee of a Minnesota Trust and what does one do?

by Flanders Law Firm LLC on May 28, 2013

Minnesota Trustee of a Trust

If you live in Minnesota and you’ve created or are considering creating a trust to help manage your estate then you’ve likely encountered the term “trustee.”

You might be wondering what exactly a trustee is and how they function. If so, you’ve come to the right place. Without further ado, let’s dive in.

What is a Minnesota trustee?

At the most basic level, a trustee is someone who supervises the functioning of a trust. Sounds simple, right? Not exactly, but it’s a good place to start. Trustees are individuals who hold legal title of property for another person, called beneficiaries.

If you’ve been named a trustee, congratulations! Being designated a trustee means someone values your judgment and trusts your decision-making abilities. However, the job also comes with serious responsibility.

Trustees are not mere figureheads, instead they are critical components of a Minnesota Trust, ensuring that the fund functions properly and follows the wishes of the person who created the trust. It’s because of this that selecting a good trustee is so vital to the long-term success of a trust fund.

What do Minnesota trustees do?

As was said before, being a trustee is much more than a ceremonial appointment, there’s a lot of work that comes with taking on the job. For instance, valuing and reassessing the value of the property contained in the trust, conducting transactions and transferences of money, making distributions to beneficiaries, detailing records of all financial transactions and recording and distributing the minutes from any meetings are all tasks that fall within the purview of a trustee.

One of the biggest jobs of any trustee is to keep track of all the income into and distributions out of the trust. In almost all cases this means that the trustee must prepare an annual account (defined in Minnesota Statutes 501B.22) of all this information and provide it to all the beneficiaries of the trust.

What are a trustee’s responsibilities?

As a trustee, you accept a fiduciary role with respect to the beneficiaries of the trust that you manage. This duty applies not only to the current beneficiaries, but also to any remaindermen who will receive trust assets upon the death of those currently entitled to benefits. Being a fiduciary means you will be held to a very high standard of conduct and means you must pay very careful attention to the trust investments and financial disbursements or risk legal liability.

Trustees are required to make prudent investment. Though this is somewhat vague wording, it means that you are not allowed to place money in any kind of speculative of obviously risky investments. You must always keep in mind that you owe a duty to current and future beneficiaries. The trick here is that while it might be in the best interest of the current beneficiary to invest money more aggressively (read: risky), it would not be the in the best interest of future generations who are depending on that money to grow for many years to come.


While no trustee is permitted to delegate their responsibilities and duties to the beneficiaries of the trust, they are allowed to delegate the functions they must perform each year. That means trustees are empowered to hire financial advisors to make investments for the trust, accountants to handle taxes and bookkeeping and lawyers to handle any issues that arise. However, it is still your responsibility to use all prudence to hire competent professionals to conduct these functions, ensuring that the best interests of the beneficiaries are tended to.


So far it sounds like being a trustee is a lot of work and comes with very little reward, right? Certainly that’s true in some cases, but trustees are entitled to be paid a reasonable fee for their services. Though family members seldom accept fees for their work that depends on the facts of the particular case. Determining what a reasonable fee is can be difficult. If you select a bank, law firm or a trust management company then they will generally charge a certain percentage of the funds under management. Some trustees charge for their time, again, it depends on the facts of your specific estate plan.

An experienced Minnesota estate-planning lawyer can help walk you through the complicated process of establishing a trust and selecting a competent trustee to oversee the fund. For more information on estate planning in Minnesota, along with a variety of other topics, contact Joseph M. Flanders of Flanders Law Firm at (612) 424-0398.

Source: Living Trusts,” published at AG.State.MN.US.

See Our Related Blog Posts:

Establishing A Special Needs Trust In Minnesota

What’s a living trust and how does it work in Minnesota?

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