A Trustee’s Fiduciary Responsibility
Many people feel honored to be asked to serve as a trustee of a trust without realizing the responsibility it entails. A trustee has a legal relationship with the beneficiaries of a trust. This legal relationship imposes many duties and obligations on the trustee.
Among these duties are the duty:
- to act with a high standard of care,
- to gather, manage and control the trust assets,
- of loyalty to all parties,
- to avoid a conflict of interest,
- to treat all beneficiaries equally,
- to carry out the terms of the trust, and
- to invest and manage assets in accordance with the terms of the trust and the law.
A trustee must take care to avoid co-mingling the assets of the trust with the trustee’s own assets. A trustee must be prepared to report to the beneficiaries to keep them informed of the trust’s activities and a trustee generally will have a duty to account to the beneficiaries for the assets, the income, and the expenses of the trust.
These are just a few of the many legal duties and obligations imposed on a trustee. We have prepared a guide for trustees to aid them in undertaking the administration of a trust. When we meet with clients that will administer a trust, we strive to explain the duties of a trustee and to guide them through the process of administering a trust.