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Estate Planning Newsletter

  • Distribution of a Missing Person's Property
    When an individual dies, their estate must be administered and distributed according to their previously established estate plan (if the decedent executed an estate plan prior to their death) or state intestate succession laws (if the... Read more.
  • What is 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.
  • Fraudulently Transferred Property & Constructive Trusts
    A constructive trust is a remedy imposed by a court when a person has wrongfully attained property in an inappropriate way. The court will undo the transaction and order that title to the property go to the rightful... Read more.
  • Life Insurance Policies and Marital Settlement Agreements
    Many marital settlement agreements require one party to maintain a life insurance policy on his or her life naming the former spouse as the primary beneficiary. While this provides some financial security for the former spouse, it may... Read more.
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A Trustee's Role

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.

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