Function

• The law requires that every trust name a trustee to manage the trust. The trustee holds legal title to all of the property placed in the trust. As legal title holder, the trustee has the legal capacity to sell, invest, trade or manage the trust property.
  
  

Considerations

• To properly fulfill their duties under the trust, trustees must review the trust terms. Every trust is different, so a trustee must be familiar with the unique qualities of the trust she manages. Additionally, trustees must consider the state laws in which they operate. Some states, for example, have specific restrictions on how to invest trust property.
  
  

Types

• Many people create revocable living trusts as part of their basic estate plan, and as a matter of convenience and financial prudence they simply name themselves as trustees. Other trusts, though, appoint professional trustees, such as attorneys or banking companies. Professional trustees provide the benefit of experience, expertise and impartiality.
  
  

Fiduciary

• Every trustee should understand that he is a fiduciary of the trust. This means he owes very specific legal obligations to the trust and the beneficiaries of the trust. For example, trustees who sell trust property to themselves at a discount can face serious legal repercussions for breach of fiduciary duty. Generally, a trustee must act at all times in the best interest of the trust and the beneficiaries of the trust.
  
  

Benefits

• A person who creates a trust and then names himself as trustee benefits from reducing the cost of managing the trust. However, a professional trustee, while expensive, reduces stress and administrative relief. Trustees also benefit from their appointment because most trusts provide financial incentives for trustees. Acting as a trustee is a full-time job for many attorneys and banking departments.