As the trustee of a trust, you undertake certain responsibilities which benefit others. These responsibilities are called fiduciary duties. These fiduciary duties include:

Duty to Make Trust Property Productive

·         Duty:  A trustee is under a duty to the beneficiary to use reasonable care and skill to preserve the trust property, and make the trust property productive. This is particularly relevant when a trust owns land or real property. 

Duty to Administer the Trust in Good Faith

·         Duty:  A trustee is required to administer the trust in good faith and in accordance with its terms and purpose. A trustee also has a duty to administer a trust for the best interest of the beneficiaries.

Duty of Loyalty

·         Duty:  A trustee owes a duty of loyalty to the beneficiaries of the trust. Specifically, this means that a trustee has a duty to administer the trust solely in the interests of the beneficiaries and may not, under any circumstances, engage in a transaction that reflects a conflict of interest and/or self-dealing.

Duty of Impartiality

·         Duty:  A trustee must administer the trust in a manner that does not disproportionately benefit one beneficiary over another. In other words, while administering a trust, a trustee must equally protect the interests of each beneficiary.

Duty of Prudent Administration

·         Duty:  A trustee must administer a trust as a “prudent person” would. This means that their decisions must be intentional, and be made after considering several factors including: 1) the purposes of the trust; 2) the terms of the trust; 3) any distributional requirements; and 4) any other circumstances relevant to the trust or its administration. Trustees must exercise “reasonable care, skill and caution” when carrying out their duties.

Duty to Inform and Report

·         Duty:  Trustees must provide beneficiaries with a report describing details of their administration of the trust at least 1) annually, 2) at the termination of the trust, and 3) at the termination of the trustee's tenure as trustee. Upon request, a trustee must provide to a beneficiary a copy of portions of the trust relevant to that beneficiary's interest. 

Duty to Enforce and Defend Claims

·         Duty:  Trustees have a duty to enforce and defend claims on behalf of the trust. This includes an obligation to take steps necessary to collect trust property so that it may ultimately be administered as part of the trust. 

Record Keeping and Rule Against Commingling Funds

·         Duty:  A trustee is required to keep adequate records of the administration of the trust. This includes an obligation to keep trust property separate from their own property. 

Prudent Investor Rule

·         Duty: A trustee is required to invest and manage trust assets as a “prudent” investor would. 

Fulfilling these responsibilities is a time-consuming and difficult task, but you don't have to do it on your own. Our experiences attorneys at Holland Law Group have helped countless trustees fulfill their responsibilities. Give us a call today at 623-250-7890 and let us help you navigate you through this extensive process.