When a person develops a trust, they will appoint a trustee to manage the assets named in the trust. The trustee has a fiduciary duty to manage the trust in a way that serves the best interests of the beneficiaries – those who will inherit the property after the trustor’s death. Aside from distributing the assets to the beneficiaries according to the trustor’s wishes, the trustee has various legal responsibilities when caring for the property.
Duty of Loyalty
The trustee must be loyal to the beneficiaries. That means that the trustee cannot enter into any transaction with trust funds or assets that would harm the beneficiaries’ interests. Nor can they undertake any dealing that allows them to profit from the deal.
Additionally, if multiple beneficiaries are named in the trust, the trustee cannot act in a manner that serves the interests of one beneficiary over the other.
Duty to Act Prudently
Because the trustee has legal control over the assets in the trust, they must act sensibly when managing it. Incurring costs on and administering the trust must be done with care and caution in a way a reasonable person would have.
Duty to Handle Trust Matters
Generally, the trustee must take care of trust matters that they can reasonably handle on their own without delegating tasks. However, in certain circumstances, they can refer to an expert for specific duties such as accounting or investing. When entrusting responsibilities to a professional, the trustee must use reasonable care to select an expert to handle a task and establish the parameters of the job to meet the terms of the trust.
Duty to Account
The trustee must keep accurate records of the trust assets and report updates or changes to beneficiaries. As part of this duty, the trustee must ensure that they keep trust property separate from their own. The trustee can be held liable if they mix assets and use part of the trust for personal matters.
Contact Bridges, Jillisky, Streng, Weller & Gullifer, LLC for Legal Representation
If you have been named a trustee, speak with our attorney for help understanding your legal duties for managing and administering the trust. We have extensive experience handling estate planning matters, and we will work closely with you to provide sound advice and guidance throughout the process.
Schedule a free consultation by calling us at (937) 403-9033 or contacting us online.