Frequently Asked Questions Regarding Trust Administration
- Can a Trustee take a fee for acting as a Trustee?
Answer – First you have to look at the terms of the trust document to determine whether it permits compensation for a trustee. The trust document may be silent on the issue or may have a provision that ‘reasonable compensation' may be taken. What does OHIO trust code say – RESEARCH
- Does a Trust need a separate bank account?
Answer – If the trust is ‘irrevocable' (often upon the death of the trust creator then trust will then become irrevocable) then yes a separate bank account should be opened for the trust. This trust bank account should be used to pay all of the expenses associated with the trust.
- Do I have to use my own social security number for the trust?
Answer – No you do not have to use your own social security number but should obtain a federal identification number for the trust. This can be obtained from the IRS and should be used to open a trust bank account and for general banking purposes.
- Do I have to give a copy of the trust document to any of the beneficiaries?
Answer – YES - Under Ohio Law a trustee must provide written notice of the existence of the trust and notify the beneficiaries that they are entitled to a copy of the trust. [1]
- As a trustee am I personally liable for the debts or expenses of the Trust?
Answer – Generally the answer is NO – An individual who is a trustee is acting in their capacity as the ‘fiduciary' of the trust. A Trustee has a fiduciary responsibility to act in good faith and follow the terms and conditions of the trust document. So absent any fraud or illegal acts of a trustee, an individual who is a trustee has no personal liability.
- Can a Trust Operate a Business?
Answer – Yes, a trust is able to operate a business, however it is actually the trustee in their role as a fiduciary on behalf of a trust that can operate a business. A trustee on behalf of a trust can own assets such as stock in a corporation or a membership interest in a Limited Liability Company.
- Does a Trust have to File any documents with a court or any governmental agency?
Answer – No (Generally) – In Ohio once a revocable trust is created there are no documents that have to be filed with any governmental agency. That is one of the benefits of a trust in that it allows a person to maintain a certain amount of privacy.
Ohio Law does permit an “Ohio Legacy Trust” [2]which is an Asset Protection Trust that does require an Affidavit be filed with the local county.
- How do you remove a person from serving as a Trustee?
Answer – A person can be removed from serving as a Trustee if it can be established that they ‘breached' their fiduciary responsibility as a Trustee. In Ohio, this type of litigation is generally in the local probate court but the court of common pleas also would have jurisdiction.
[1] O.R.C. 5808.13 (B)(3)
[2] O.R.C. 5816
