Can A Beneficiary Also Serve As A Trustee In Massachusetts?
A trust can be an effective, efficient way to leave assets to one or more beneficiaries. When you set up a trust in Massachusetts, you must appoint a trustee to oversee it. This raises an important question: Can the beneficiary of a trust also serve as the trustee? The answer is generally “yes”—though it may not always be the right choice. Within this blog post, our Norwood trusts lawyer explains the key points to understand about trustee laws in Massachusetts.
Understanding the Role of the Trustee
Investopedia defines a trustee as “a person or firm that holds and administers property or assets for the benefit of a third party.” In other words, the role of a trustee involves managing the assets held in a trust. The goal is to ensure that the trust is administered according to the trust’s terms and for the benefit of the beneficiaries. In Massachusetts, trustees have a fiduciary duty to act in the best interests of the beneficiaries. They are also responsible for maintaining accurate records, providing regular accountings, and communicating transparently with all beneficiaries.
A Beneficiary Can Generally Serve as the Trustee in Massachusetts
In Massachusetts, it is legally permissible for a beneficiary to also serve as the trustee of a trust. Why is this desirable? The arrangement allows the beneficiary-trustee to have direct control over the management of the trust assets. Though, they are still required to follow fiduciary duty standards as set forth by Commonwealth law. Notably, serving in both roles requires careful attention to avoid conflicts of interest and to ensure fair treatment of all beneficiaries.
Be Careful: Why a Beneficiary May Not Be the Right Choice as a Trustee
A beneficiary can serve as a dual role and be the trustee in Massachusetts. However, they may not be the right option for every situation. Here are three reasons why it may not be the right choice to appoint a beneficiary as a dual-role as a trustee:
- No Interest in the Work: A beneficiary who serves as a trustee without a genuine interest in the administrative responsibilities may neglect essential duties. It could result in serious mismanagement of the trust’s assets.
- Lack of Knowledge/Experience: Beneficiaries without prior knowledge or experience in managing trust assets may struggle with administration—including legal compliance and financial decision-making.
- Increased Risk of Conflict: Finally, having a beneficiary act as a trustee can lead to conflicts of interest. It can especially be an issue if the decisions appear to favor the trustee over other beneficiaries.
Consult With Our Massachusetts Trust Planning Attorney Today
At Fisher Law LLC, our Massachusetts trust planning lawyers are standing by, ready to protect your rights and your interests. If you have any questions about trustee services, we can help. Call us now or connect with us online for a completely confidential initial consultation. From our office in Norwood, we provide trust services throughout the Greater Boston area.
