General Duties of a Trustee

General Duties of a Trustee:  One of the more important considerations when discussing estate planning options is the institution or individual named as Trustee or Successor Trustee.  If one of the estate planning vehicles being considered is a revocable or “living” trust, with the grantor acting as the initial trustee, the individual or institution named as successor trustee may very well assume the duties of trustee in the grantor’s lifetime, in the event of incapacity or the inability to handle financial affairs occurs.

General Duties of a Trustee:

  1. Duty of adhering to the terms of the trust agreement, and to know and understand its terms;
  2. Duty to act in good faith, using care, skill and diligence;
  3. Required to take and keep control of trust property, to preserve it, keep sufficient insurance to protect the trust property, and to keep trust property in reasonable repair;
  4. Required to enforce claims due to the trust, and to defend against claims brought against the trust;
  5. Duty not to engage in self-dealing and not to co-mingle assets with his or her assets, or with another trust;
  6. Required to use a high degree of skill and care in investing trust property, and required to keep trust assets invested productively;
  7. Required to keep adequate books and records, to render periodic statements of accounts to beneficiaries (if required by the terms of the trust agreement), to make distributions to the beneficiaries of their proper shares of trust income, and ultimately the trust principal in conformity with the provisions of the trust;
  8. Required to provide beneficiaries with essential information, to deal fairly with them, and to not show partiality among them, except if in conformity with the provisions of the trust, or a properly exercised discretion to distribute income or principal.

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