The term trustee refers to an entity that is responsible for holding and maintaining assets on behalf of a beneficiary. The trustor is the person or business that gifts assets to a trust, while the trustee is responsible for its safekeeping.
A trustee can be an individual or financial institution that has a fiduciary responsibility to a trustor. The roles trustees can play range from their appointment as part of a bankruptcy proceeding, or managing retirement plans for large corporations, through the oversight of the assets placed in a trust for a single beneficiary.
In fact, they play one of the three essential roles when establishing a trust:
Trustees are utilized when it is advantageous to move the responsibility for assets away from the beneficiary. For example, a trust may be established on behalf of a minor. Finally, a trustee has a fiduciary responsibility to the beneficiary of a trust. They are governed by laws as well as a code of ethics.