It also allows the preferred beneficiary to effectively use their personal deductible and benefit from tax-free income up to that amount. The directors manage the affairs related to the trust. The trust`s business may include the prudent investment of the trust`s assets, the regular settlement and reporting to beneficiaries, the filing of necessary tax returns, and other obligations. In some cases, which depend on the trust instrument, administrators must decide, depending on the measure, whether beneficiaries should receive trust funds based on their benefits. An agent can be held personally liable for problems, although fiduciary liability insurance can be purchased like liability insurance for directors and senior executives.