How To Manage a Trust Fund and eSign as a Trustee in the Age of eSignature

Most of us have heard the term “Trust Fund”, and many of us have a preconceived notion that it’s only for the wealthy. It’s not, anyone can have a trust, and depending on your circumstances and assets one might be right for you, your family or for your business.

In this article, we’ll discuss what a trust fund is, who the people involved are, how it works, how to sign trustee documents, probates, some of the eSignature solutions available to you, and more. Before we get started, we’d like to mention that while this information is as accurate as our research could uncover for the continental United States, there may be some errors in the information provided. Please consult legal counsel before making decisions or taking actions. That said, let’s get started!

What is a trust

A trust is an ancient concept with written forms of them dating back thousands of years. It’s an arrangement that’s legally-binding in nature and grants a trustee the ability to manage and hold assets on behalf of its beneficiaries. In short, it’s like a contract with special terms and regulations that the grantor determines upon it’s drafting document.

We can imagine a trust like a box, and this box is managed by someone, filled by someone, and benefits someone. The filler, or grantor, sets the rules about how the contents are used, managed, and distributed by the manager, or trustee. Those who receive distributions are the beneficiaries. Distributions can be in the form of receiving something directly from the box or even as dividends. What can be in the box doesn’t have many limits, and can include real estate, money, businesses, bank accounts, hard assets, etc.

Once the assets are transferred into the trust, they’re no longer ‘yours’, they now belong to the trust. A trust is not considered a legal entity, but it does carry legal weight. A trustee must be sure they follow the terms of the trust or they'll face heavy legal consequences.

Interestingly, the grantor, trustee, and beneficiary don’t necessarily need to be different people, and the trust can be used as a way to manage accumulated wealth or to help with taxes. Although in general, taxes for trusts are often much higher than for an individual, so many trust holders have a system to extract funds into the individual’s name quarterly for self-employment taxes, and either put the money back after, or not.

What are the two types of trusts?

The two types of trusts are revocable and irrevocable. A revocable trust is also known as a revocable living trust, or living trust. And really, the names say it all. With a revocable trust, if you want to close it down and return all of your assets to yourself, change the beneficiaries, or modify the terms defined therein you can at any time. With an irrevocable trust, this can be nearly impossible and they can be very complicated to set up, depending on the country you’re in.

Other titles for trusts are generally just terminology fluff, or lawyer word beautification. They might be drafted in a specific way that is an area in which the lawyer does well, but the type of trust itself is generally no different other than the terms written in the drafting document, or the type of assets put into the trust.

However, a revocable trust will become irrevocable once the sole grantor has passed away, or has become mentally incapacitated. At which time, the trustee is bound to manage the tasks and duties assigned to him and nothing can change the trust.

Taxes for revocable trusts can be very high. It’s generally recommended that if the distribution of wealth is to be done quickly after the death of the grantor, that it be done as swiftly as possible while retaining the funds to file and pay the state and federal taxes in the name of the trust.

Can a trustee resign?

A trustee who cannot fulfill, or who is not willing to fulfill his/her duties may grant the title of trustee to someone that has been listed, if someone else has also been named and the terms of the trust specify the process. If no one else has been named, and/or the terms of the trust do not specify the terms of trustee resignation, request that the terms be amended and that a successor trustee be named.

Additionally, if a trustee is also incapable of performing the duties due to mental incapacitation or death, if someone has been named as a successor trustee, they’ll inherit the tasks therein.

What are the terms of a trust?

The terms of a trust can be anything you want them to be within whatever legal limitations your jurisdiction dictates. However, that said, if you do not specify your terms, you’ll be required to follow the terms drawn by the state or country you’re in. This will most likely not be beneficial to you or your beneficiaries. You should always draft your own terms with the help of legal counsel.

One of the interesting limitations of a trust’s terms is that in the United States, you may not name a beneficiary who is unborn. For example, if you have children but not grandchildren, you may not name your first unborn grandson. In some other countries it’s possible to do so.

But now it begs to question; if we have a trust, how do we sign documents within legal requirements?

How does a trustee sign documents?

You might be asking yourself, how to sign documents for someone as a trustee and that’s a great question, and one that seems to have many answers on an internet search. However, there’s one answer from a legal perspective that’ll still be legally binding while simultaneously saving you time when handling numerous documents. When a trustee is acting in the name of the trust, he or she should sign their name followed by either the word ‘Trustee’ or the short-form ‘TTEE’. In general, that’s how to sign trust documents as a trustee of a trust.

While it’s possible to sign your name as “Robert Frost as Trustee of the Frost Family Trust”, this can take a lot of time, exceed the space available on documents, and if it’s not requested for you to do so, is not necessary.

If the recipient of your signature requests additional documentation to prove that you're in fact the trustee, you can provide them with your certificate of trust from the grantor. The certificate will be required for arranging things such as contracts to show who they’re doing business with. This certificate will include identification of who’s able to manage assets in the name of the trust, the details of the trust such as its creation, and if revocable how to and who may revoke it. The certificate should not list or include beneficiary data, this maintains their anonymity which may save them from influence or other problems.

If you do not have a certificate of trust, arrange to have one prepared or request one from the grantor ahead of accepting the responsibilities. The certificate is quintessential to performing your duties as trustee, even if you’re also the grantor.

There are some caveats, though. If you're the grantor, beneficiary, and the trustee, and the trust is also within the same bank account as yours, when you’re writing checks it isn’t necessary to add the title at the end. However, the title applies to any action that requires a signature which demands an agreement or official action when acting in the name of the trust, such as managing the bank account itself.

By signing a document as “Robert Frost Trustee” you're also legally protecting yourself from personal liability to agreements and contracts by acting in the name of the trust.

That should answer the question "how does a trustee sign documents?"; what about a successor trustee?

How does a successor trustee sign documents?

The answer, while you’re the sole trustee of the trust, it’s a little more complicated. You can’t simply sign your name followed by either ‘Trustee’ or ‘TTEE’ when acting in the name of the trust without providing documents. You need to prove that your predecessor is unable to complete the tasks in the case of death, and also that you’re in fact the current trustee.

You’ll need to acquire a certified copy of the death certificate of your predecessor from the county clerk, or local government office that oversees these documents, depending on where you're. You’ll need to prepare an affidavit of the death of the trustee in every county in which there’s  real estate. The affidavit forms may be available at the county office, but it’s advised to call ahead of time to be sure. And lastly, you’ll need a trust certificate for when dealing with those who hold trust assets, such as banks and government agencies responsible for asset records, such as asset ownership titles.

With these documents in tow, you should be ready to get started, now you can sign as trustee. However, as a successor, you may need to write long-form signatures more often than your predecessor; it would be wise to ask if the recipient of your signature requires it, until you get a feel for how things operate in your area.

What is probate?

Probate is a term used to describe the process of determining the legal validity of a testator’s living will and testament. If probate is granted, then the testator’s estate and wealth is distributed according to his will’s guidelines; if probate is not granted, then it can become property of the state if the intestacy laws do not properly govern or cover the circumstances for distribution of the assets. The executor, or otherwise known as the “Personal Representative” because we can’t seem to leave words alone, is the individual who carries out the distribution of assets and estate. The executor will be appointed by the same judge who grants probate.

Probate can take weeks, months, or even years to be approved, often leaving family members and spouses in desperate financial positions after the expenses related to funerals, consequential stress related medical conditions, or from personal pensions being unsustainable.

Can a trust be faster than probate?

If you have a trust and depending on the type, its assets can be distributed immediately according to the trusts terms, as they’re not in your name, they’re in the trust’s name. The assets can also be managed to be distributed over a long period of time as dividends or direct payments, pay for your grandchildren’s university tuition, or ensure that your business stays operational to protect your workers’ jobs. This does have limitations and it’s recommended to consult several legal counsels in different counties, and in some cases, states, before making any decisions.

What is a Testamentary Trust?

A testamentary trust is an irrevocable trust that's created by a will when an individual dies. The creation of the trust is the subject of probate, but once probate is granted the probate transfers the assets into the testamentary trust. Everything is subject to the court, and if documents aren’t in order, can end very poorly.

Unlike a revocable living trust, your assets remain in your name until you pass away. This means that if anything goes wrong in the court where probate is determined, the state could end up distributing your assets and estate in ways you did not wish for. Additionally, the taxes upon your estate may be too much for family members or other beneficiaries to handle before everything is finalized.

All types of trusts and their relationship with electronic signatures: everything you need to know

Can a trustee or successor trustee eSign?

First of all, we have some bad news, the activities of a testamentary trust are not covered by the ESIGN Act.If you’re the trustee of a testamentary trust, you must sign everything on paper with a wet signature.

However, many websites will seem to leave out the term testamentary and state that all trusts cannot electronically sign documents, this is untrue! The law itself is quite clear on this matter, at the bottom of page 6 under 114 STAT. 468, Section 103; Specified Exceptions:

When it comes to the European Union, please note that under eIDAS, you must use a specific tier of a digital signature for legally-binding activities, not an electronic signature. Whether trusts are covered under eIDAS is another matter. Due to the amount of identification and verification involved in digital signatures in the EU, we’ll not discuss it here, as trustworthy information is hard to come by to compare due to the nation-to-nation variations in regulations.

How does a trustee eSign documents?

To eSign as a trustee, or even to electronically sign documents as an individual, the process is pretty straightforward, depending on the software you use. It can be as simple as adding the image of your signature to an audited document on a platform like ours, or our competitors. You also have the option to draw your signature by multiple means or to type it; which if typed will appear in a cursive or calligraphy-like font.

Let’s talk about how eSignatures for trustees are different from those of individuals.

What makes eSigning as a trustee different?

Well first of all, you should include a copy of your certificate of trust at the end of the document to ensure that, if contested, the document itself contains the relevant information. If including it or appending the certificate to the document isn’t possible, you can include it as an attachment to the document, or as an attachment to an email, ensuring that you CC it to relevant parties. In addition, don’t forget to add that you’re signing as a trustee after your signature. It would be recommended to use the long-form of the title within your signature, such as “Robert Frost as Trustee of the Frost Family Trust”.

You can either use a drawn signature and add a text field, if you’re the one drafting the document, or use a typed signature and include this information. However, if there isn’t enough space to do so, you can either use “Robert Frost Trustee”, or “Robert Frost TTEE” to save space, granted that you have included the certificate of trust to cover your bottom.

If you're a successor trustee, ensure that your successor signature is accompanied by the relevant documentation as mentioned above when necessary and to always include the certificate of trust.

Where can a trustee find a reliable service for electronically signing documents?

There are a number of services available that grant the ability to electronically sign. A couple of great options are signNow, SignEasy, and Hellosign. All three don’t require a credit card for their free trial period. For your sake, we’ll focus on what’s accessible for you to try as well, without any surprise commitments or wasted hours waiting to speak with a living-breathing human representative.

Let’s talk about the process of how to eSign a document with each of them.

1. signNow

The first thing you should prepare is your form or document that needs to be signed, such as an agreement or contract. Once your document is ready and finalized, simply log into signNow and on the default landing page you’ll find two ways to upload your document.

Click Upload Documents at the top of the page to manually seek out your files in your file browser, and you can also upload multiple files at the same time. The second method is by dragging and dropping your files onto the main page. Whichever route you take, the results will be the same.

Now that your document(s) is ready, click on the name of your file in the same window, and wait a moment for the editor to launch.

While in the editor, you’ll see a number of options on the left and right sides, in panels. On the right side, you’ll find properties of fields you’ve placed and selected, and on the left you’ll find the available fields to enter information.

On the top left corner you’ll see Edit Signers, and by selecting this you can add signers, set yourself as the signer, and set up the document’s signing order. You can also sign the document yourself without sending it to anyone, if you need to, or sign it before others using the field My Signature under Edit & Sign on the left panel, near the bottom of the editor. You can also customize the name you see for each signer for use while in the editor to eliminate or to prevent any confusion. If you set yourself as a signer, when you Invite to Sign the document, you’ll also receive an email inviting you to sign. It is recommended that as the sender, you be the last to sign to prevent anyone from preemptively saying the agreement is contractually obliging before you’re sure it is done and you agree to whatever new information may have come to light since you’ve first sent it out.

When you’ve finished setting up your signers, you need to set-up your entry fields. These range from radio buttons with conditional logic, to simple text fields for signers to fill out important information. Additionally, you can either select a field you wish to place and click the document to place it, or drag and drop it onto the document.

The fields available are:

-Under Tools:

  • Signature Field
  • Text Field
  • Date/Time Field
  • Calculated Field
  • Initials Field
  • Checkbox Field
  • Radio Button Group
  • Dropdown Field
  • Request Attachment

-Under Edit & Sign:

  • My Signature
  • Text
  • Today’s Date
  • My Check

We also have an auto-alignment feature to help you arrange your fields in a timely manner. If you’re unhappy with the positioning of any of your fields, simply select the dubiously positioned field and on the right panel, select Location. Here you’re able to manually adjust its position in pixels in reference to the document’s top-left corner.

When you’re placing your fields, you can select which signer is able to fill in any field simply by selecting the aforementioned field and on the right-hand panel selecting the signer from the dropdown menu under Role at the very top.

Now that we’ve set it all up and it’s ready to roll, you can Save and Close, or go straight for the prize and select Invite to Sign. From there, your signers, if already set-up, will be prepared and you can then customize each recipient’s email subject and body, authorization requirements or password, expiration, reminder frequency, and more.

From here, when you’re satisfied, click Send Invite and wait for the magic to happen. At any time, you can check the status, History, Audit trail, and other important information regarding the document from the home page, where we started, by simply selecting More next to the document we’re interested in.

When someone signs a document, the process is almost universal; you can type your name to be represented by a cursive or calligraphy-like font, draw a signature, or upload an existing image you’ve already made of your signature.

2. SignEasy

SignEasy has a pretty simple layout and procedure, albeit with some limitations that you might not think about at first glance. Don’t get us wrong, it is nice software, and we really appreciate their straightforward free trial and what appears to be transparent pricing and practices. This type of honesty is something the world could do with a lot more of.

When you login you’ll be greeted with the default landing page, Documents. Here, you can either select Start Signing at the top, and select from either Sign Yourself or Request Signature; or alternatively, you can drag and drop your file into the window and you’ll be presented with the same options.

Mind you, once you’ve made your selection, we could not find a way to change the selection to the other option. However, you can add yourself to the signers list, though unfortunately the option of signing yourself prior to sending the document to others doesn’t seem to be available.

If you do decide to select Start Signing, something interesting that SignEasy does is keeps your original files. If you select Start Signing, you can find all of your original files, a template you’ve pre-made, or upload a new file.

Note:  templates are pretty universal across all of the platforms we’ll be discussing, although their implementations do vary; though, we won’t be covering them today.

Now that we’ve made our decision to sign ourselves or to have others sign the document, we will be greeted with the editor. There are only a handful of options available: 

  • Signature
  • Initials
  • Date
  • Text
    • Text
    • Name
    • Email
  • Checkmark

That’s not so many, but it’s enough for most individuals preparing pretty standard agreements.

Selecting the field types and clicking on the document doesn’t yield any results, so you’ll have to drag and drop them onto the document. And unfortunately, there isn’t an auto-align feature, or a system in place for positioning the field precisely. The only movement option available is via clicking and dragging. Resizing doesn’t auto-snap either, but it does remember the scale and size of previous fields you’ve placed of the same type.

You can change who is supposed to fill certain fields by first selecting a field and within the menu that pops up click on Signers and choose which you’d like to assign. Do pay attention however, your last signer selection will now be assigned to every new field you place in the document.

Once you’re satisfied select send, and if you're one of the signers on the document, you’ll be asked to sign it now. If you do so, you'll be taken to the document in another mode to enter information and sign it, although the document has already been sent to other recipients.

You can review your documents by visiting the default homepage for users, and ensuring you’re on the Documents page. If the document is pending, you can send a reminder, void it, or view it. Unfortunately, it doesn’t appear that you can view the history or audit trail prior to it having been signed by the recipients; therefore you cannot see if they have viewed it.

With some features lacking, such as an automated expiration on documents or automated reminders to the signer’s email, you'll need to ensure you’re tracking your documents closely with SignEasy. However, if you’re looking for something simple and functional, it could be for you; for businesses with more documents and team-members to manage, it might be best to check out the competition.

3. HelloSign

HelloSign is another of our competitors with a free version of their features, and we commend them for it! However, keep in mind that their free plan only covers three documents a month.

When you first sign in, you’ll be greeted with a page titled Sign documents and you’ll find the two options Sign or Send and Create a Template. Let’s select Sign or Send and on the next page we can upload a file by manually selecting it by clicking Upload file, or by dragging and dropping the document onto the page. Although, if you drag and drop, nothing will appear to indicate the page is accepting the file until you release it. With your file uploaded, you'll need to look at the top-right corner of the page to proceed, by clicking Next in a blue button. The button isn’t very clearly visible until you look around the page to find it.

Once you’ve hit next you'll be able to enter the signer’s information, or selecting I’m the only signer. Let’s add a faux signer for now, as well as ourselves to see what happens. Hit next when you’re done to open the editor.

Once in the editor, you’ll find a rather shy list of fields that include:

  • Signature
  • Initials
  • Date Signed
  • Textbox
  • Checkbox

When placing fields, they may be placed by selecting them and clicking on the document where you’d like them to be placed or by dragging and dropping them onto the document.

Each field can be assigned to a signer on the right panel when an existing field has been selected in the section Assigned to. Like in SignEasy, once you’ve selected a signer, the next field placed will automatically assume it is for that signer as well. In the Assigned to properties, you can also select Me (now) to fill the field yourself while preparing the document in the editor.

When you’ve finished preparing your document, click next, again on the top-right of the page, and you’ll be greeted with the option to write a custom message. Unfortunately, the message here is for all users, not each, so unfortunately you cannot personalize it for each individual. You can also give your document a title here, that will be visible to the signers; which it'll also be stored in your documents under. Now that you’ve finished this step, click Send for Signatures on the top-right, and you’re done.

You can now go to the Documents page from the menu on the left to take a look at your document, send reminders, fill out and sign, rename, or download. However, it doesn’t look like the audit trail is accessible yet, which is unfortunate.

How to esign on mobile?

You can eSign documents on mobile through the websites directly, or by using their mobile applications. We have a signNow app for that! No, seriously, check it out!

SignEasy also has an app however, it appears that HelloSign doesn’t have an app for android and that their iOS app is only available in the USA.

Conclusion

Boy, we’ve covered a lot today and we hope that you found every bit of it to be useful. We discussed trusts, trustees, beneficiaries, grantors, eSignature laws, how to eSign on three platforms, we've answered the question of "how does a trustee sign documents", and more.

If you’re in the market for a professional-grade eSignature solution, try signNow now today for free! Upload and edit PDFs, collaborate on teams, eSign, set signing orders, and so much more.

 

Grady Andersen
Grady Andersen
Contributing Writer
November 04, 2020