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What are the duties of a trustee?

On Behalf of | Nov 24, 2021 | Trust Administration

When acting as a trustee, a person has a significant amount of power over the assets placed in trust. However, with that power comes a number of legal responsibilities. What responsibilities must a trustee fulfill?

Trustees must follow the terms outlined in the trust itself.

Trusts allow their maker to outline a variety of terms for the management of their assets. They may limit their beneficiaries’ access to funds before a certain age, or they may specify how the money placed in trust can be used. Trustees have a duty to follow those terms.

Trustees must manage the assets placed in trust.

Trustees are responsible for more than simply providing beneficiaries with funds from the trust. They are also responsible for managing those possessions in a way that maintains their value. This may include investing money or maintaining a piece of real estate.

Trustees must make regular reports about the state of the trust.

To provide an account not only of the assets in trust but also of their own management, trustees must regularly report on the state of the trust and the actions they have taken to maintain it.

Trustees must act in the interest of a trust beneficiaries, not themselves.

While trustees manage the money and property placed in trust, they must make decisions based on the needs of those who are the beneficiaries of that trust. If they make decisions that benefit themselves, charge excessive fees or make investments that align more with their needs than the beneficiaries’ needs, those actions could be a breach of that duty.

Unfortunately, not every person upholds these and other responsibilities related to their position as trustee. If a trustee fails to do their duty in managing a trust — whether due to incompetence or because they intend to abuse their position to support their own interests — the beneficiaries of that trust can hold them responsible.

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