Small Business

The Trustee and the Beneficiary

18 Aug , 2014  

One type of business structure is a relationship between a Trustee and Beneficiary called a Trust. What kind of business relationship is this? What is a Trustee? What is a Beneficiary?

A Trust business structure is when there is a legal relationship between two people:

Trustee – is the person or association that holds the legal title to the trust property. A Trustee can be appointed by the court when not otherwise designated. Another party in the trust is the Trustor who sometimes already serves as the Trustee.

Beneficiary – is a person or an association who receives every benefit of the trust.

Basically, it’s the Trustee who has their responsibilities piled up. As someone or a corporation who is responsible for managing the assets, a Trustee is required by law to ensure the following duties to be performed well:

  • Maintaining complete accounts and records
  • Administering the property with fine skills for the welfare of all the beneficiaries and must not use trust principals for their personal benefits
  • Keeping the property safe and productive
  • Performing according to the terms and conditions of the trust
  • Executeing necessary taxpaying duties

In choosing a Trustee, you should consider the person’s experiences and competence and of course, they should have the willingness to perform the specified task. A Trustee can either be a corporation, association or simply an individual and they can be a relative or a business associate. When selecting considerations for a Trustee, a bank’s help can be considered as they usually offer their specially trained managers who provide services such as counseling. Again, if there’s no one designated, the court will then decide.

When creating this structure, the most important thing between the two parties must be the trust because just like the name itself, it will go well as long as there’s willingness and good relation involved.

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