Responsibilities of a Trustee

Every trust must have a trustee to properly administer the elements of the trust. Trustees can be individuals, financial institutions or even organizations.

A trustee follows the precise instructions of the trustor (or the trustor’s authorized representative), and also adheres to rules imposed by law.

Prudent Person Rule

Trustees are subject to the “prudent person” rule. This rule states that trustees should use the same standard of care and diligence that any sensible person would use in managing property. Additionally, a trustee should make a strong effort and utilize all of his/her skills in caring for the trustor’s property.

Responsibilities

A trustee has the duty to accomplish the following:

• Administer internal affairs
• Manage property
• Invest property
• Distribute income and principal
• Deal with beneficiaries impartially
• Use discretion over the important areas of the trust

Beneficiaries

A trustee has a fiduciary duty to the trust’s beneficiaries as well as to the trustor. In dealing with beneficiaries, a trustee should:

• Use property only for the beneficiaries’ interest
• Disclose important facts
• Provide additional information related to the trust upon request of the beneficiaries

Improper Activity

A trustee should not:

• Use trust property for personal benefit or purposes not related to the trust
• Acquire interests in conflict with those of the beneficiary
• Sell property to himself/herself
• Delegate his/her duties to another individual

If a trustee is suspected of improper activity or misuse of his/her discretionary decision-making powers, the court will review the trustee’s actions after a petition is filed by the trustor or any beneficiary. A trustee may also petition the court for a review if beneficiaries question his/her decisions.

© 2020 NextClient.com, Inc. All rights reserved.

• Wills & The Effects of Homicide
  If a person murders a relative, is he/she entitled to receive any of the victim’s property? In most cases, the answer would be “no.” Usually, a convicted killer cannot inherit a victim’s property, even if he/she... Read more.
• The Meaning of Probate
  Probate, a Latin term meaning “to prove the will,” is a court-supervised process that settles a person’s affairs after death. To ensure that the decedent’s final matters and wishes are handled correctly... Read more.
• Keeping Assets in a Custodial Account for a Minors
  Minors have no legal capacity to manage property. Thus, transferring property and other assets to minors can be problematic. For example, parents or other adults may wish to convey a small amount of property to a minor without investing... Read more.
• Life Insurance Uses
  There are numerous uses for life insurance. Some are obvious; others are very creative. Some of the most common uses include paying estate taxes, estate administration, inheritance equalizing and many others. Estate Taxes... Read more.

• The Coronavirus Pandemic Presents Ample Reasons to Reevaluate Your Estate Plan
• Eight Estate Planning Strategies In A COVID-19 World
• Coronavirus Legal Advice: Get Your Business and Estate in Order Now
• Rapid Rise In Stock Market Raises Estate Planning Concerns
• 5 Ways to Incorporate Charitable Giving into Your Estate Plan