What is the role of a trustee in a third-party self-settled trust?

The role of a trustee in a third-party self-settled trust is primarily to manage and oversee the trust assets. The trustee is responsible for ensuring that the trust is administered according to its terms and in the best interest of the beneficiaries. This includes various duties such as investing the trust assets prudently, maintaining accurate records, and making distributions according to the guidelines established in the trust documents.

In a third-party self-settled trust, the assets are held in the trust for the benefit of the settlor (the person who created the trust) but are managed by the trustee. The trustee has a fiduciary duty to manage those assets responsibly, ensuring that they are protected and used appropriately for the beneficiaries' benefit. This foundational function of the trustee is vital for the integrity and longevity of the trust.

Choosing beneficiaries is not typically within the purview of the trustee in this context, as beneficiaries are designated by the terms of the trust itself. Similarly, enforcing personal spending or deciding when to eliminate the trust are roles that do not align with the primary responsibilities of a trustee, which center around asset management and stewardship.