As estate planning attorneys serving Gloucester, Rockport, Manchester by the Sea, Beverly, and the entire North Shore, we have worked with many clients who consider naming themselves as trustee of their own trust. While this approach may seem practical, it can create serious legal, financial, and administrative challenges. In Massachusetts, trustees have strict legal obligations that must be met under state law, and failing to meet those obligations can have lasting consequences.

The decision to serve as your own trustee should not be made lightly. Although a trustee can be the same person as the trust creator—especially in revocable living trusts—Massachusetts law imposes fiduciary duties that are binding and enforceable. The responsibilities extend beyond simply managing your own assets; they include acting impartially toward beneficiaries, complying with recordkeeping requirements, and adhering to the Massachusetts Uniform Trust Code (M.G.L. c.203E).

Understanding Fiduciary Duties Under Massachusetts Law

Under M.G.L. c.203E, §801, a trustee must administer the trust in good faith, in accordance with its terms, and in the interests of the beneficiaries. Even if you are both the trustee and a beneficiary, you are still bound by these fiduciary duties. This means you must act prudently, avoid conflicts of interest, and ensure trust assets are invested and distributed appropriately.

Serving as your own trustee can make it difficult to maintain this impartiality. For example, if you amend your trust to favor one beneficiary over another—or make distributions that could be viewed as self-serving—you risk violating fiduciary duty. A breach can result in legal action by beneficiaries, removal as trustee, and personal liability for damages under M.G.L. c.203E, §1001.

Exposure To Personal Liability

Another major risk of serving as your own trustee is personal liability. If trust assets are mismanaged, commingled with personal assets, or invested improperly, you can be held personally responsible for losses. Massachusetts law under M.G.L. c.203E, §1002 allows courts to surcharge a trustee for any loss caused by a breach of trust.

Even honest mistakes—such as failing to properly value assets, missing tax deadlines, or overlooking beneficiary notices—can result in liability. Because trustees are expected to meet a professional standard of care, ignorance of the law is not a defense.

The Impact Of Incapacity

One of the most overlooked risks is what happens if you become incapacitated while serving as trustee. Without a named successor trustee and clear incapacity provisions, your trust may become effectively frozen, delaying distributions and asset management. This can trigger unnecessary court involvement to appoint a new trustee, contrary to the purpose of having a trust in the first place.

Administrative Burden And Compliance Requirements

Trust administration in Massachusetts requires ongoing attention to legal details, including:

Providing annual accountings to beneficiaries as required by M.G.L. c.203E, §813
Filing required state and federal tax returns for the trust
Keeping trust assets properly titled and insured
Ensuring investments comply with the prudent investor rule under M.G.L. c.203C

For many individuals, these tasks require substantial time and financial knowledge. If you are not comfortable with complex recordkeeping, tax reporting, or legal compliance, serving as your own trustee can become a stressful and risky responsibility.

Why Professional Or Co-Trustee Arrangements Can Help

In many situations, naming a professional trustee or a trusted co-trustee can provide better protection. This arrangement allows you to maintain some control while benefiting from the administrative skill, impartiality, and legal compliance a professional can provide. It also helps ensure continuity in the event of incapacity or death.

Frequently Asked Questions

Can I Be My Own Trustee In Massachusetts?
Yes. Under Massachusetts law, the person who creates a trust can also serve as trustee, particularly in the case of a revocable living trust. However, you are still bound by all fiduciary duties and responsibilities under the Massachusetts Uniform Trust Code.

What Are My Fiduciary Duties If I Am My Own Trustee?
You must act in the best interests of the beneficiaries, manage trust assets prudently, avoid conflicts of interest, follow the terms of the trust, and comply with all legal and tax requirements. These duties apply even if you are also a beneficiary.

Can I Be Personally Sued As My Own Trustee?
Yes. If you breach your fiduciary duties—intentionally or through negligence—beneficiaries can bring legal action against you. Courts can order you to repay losses personally and remove you as trustee.

Does Serving As My Own Trustee Affect Taxes?
If the trust is revocable, the IRS generally disregards it for tax purposes, meaning income is reported on your personal return. However, you must still ensure proper reporting, maintain separate trust accounts, and comply with all applicable tax laws.

What Happens If I Become Incapacitated While Serving As My Own Trustee?
If your trust does not name a successor trustee or define how incapacity is determined, administration of the trust can be delayed or halted until the Probate and Family Court appoints a replacement.

Is It Better To Have A Professional Trustee In Massachusetts?
For many people, yes. A professional trustee brings objectivity, experience, and administrative efficiency, which can reduce the risk of liability and ensure compliance with Massachusetts law.

Can I Appoint A Co-Trustee Instead Of A Sole Professional Trustee?
Yes. A co-trustee arrangement allows you to retain some control while sharing duties with a professional or trusted individual, balancing involvement with protection.

Do Trusts Require Annual Accountings In Massachusetts?
Yes. Under M.G.L. c.203E, §813, trustees must provide beneficiaries with annual accountings, unless waived. Failure to provide these can result in disputes or legal action.

What Is The Prudent Investor Rule In Massachusetts?
The prudent investor rule, under M.G.L. c.203C, requires trustees to invest and manage trust assets with care, skill, and caution, considering the purposes and terms of the trust.

Can My Successor Trustee Change My Trust After I’m Gone?
No. Once you pass away, a revocable trust becomes irrevocable. The successor trustee must follow its terms as written and cannot make substantive changes.

Call Troy Sullivan Firm Today For a Free Consultation

At The Sullivan Firm P.C., we work with individuals and families throughout Gloucester, Rockport, Manchester by the Sea, Beverly, and the North Shore to create trust arrangements that are both effective and legally sound. Serving as your own trustee may seem straightforward, but the risks are significant if legal obligations are overlooked. We can help you determine whether self-trusteeship is the right choice and, if not, recommend safer alternatives.

Call The Sullivan Firm P.C. today at 978-325-2721 for a free consultation. Our office is located in Gloucester, Massachusetts, and we proudly serve clients throughout Essex County. Let us help you protect your trust, your assets, and your peace of mind.

The Risks Of Serving As Your Own Trustee In Massachusetts