Death is Not the End
There remains the litigation over the estate.
– Ambrose Bierce
There remains the litigation over the estate.
– Ambrose Bierce
by Carol Warnick
We are constantly surprised to realize that the normal, average trustee who is not a professional fiduciary doesn’t really understand what is required of him or her and often makes serious mistakes. You would expect that someone taking over the role of being a trustee would inquire or do some type of research as to what is expected, but unfortunately many new trustees don’t seem to take the responsibility seriously enough, often with disastrous consequences.
The trustee stands in a special relationship with the grantor of the trust as well as to the beneficiaries. This relationship is unique and the trustee should keep that in the forefront of his or her mind. By appointing someone as trustee, the grantor is depending upon the trustee to both honor the provisions of the trust to the best of his or her ability, but also to respond to the needs of the beneficiaries and to maintain their confidence and trust. The trustee must be careful not to do anything which would benefit the trustee to the detriment of the beneficiaries or to ignore the duties and obligations of a trustee. Thus the word “trust” inside the term “trustee” should not be taken lightly.
The obligations of a trustee are defined not only by the trust agreement, but also by state law, some of which is statutory and some of which is common law. State laws may differ from state to state, but some basic premises hold true wherever a trust is being administered. In general, these duties of a trustee are important and can result in litigation, removal, and potentially surcharge if the trustee ignores them.
Some of the general duties of a trustee are set forth below, as taken from “What It Means to Be A Trustee: A Guide for Clients,” published in the ACTEC Journal, Volume 31, No. 1, Summer 2005.
Any trustee paying close attention to the duties listed above will stand a much better chance of making the trustee experience a positive one and will be much more likely to avoid problems or lawsuits from beneficiaries.
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This publication is designed to provide general information on pertinent legal topics. The statements made are provided for educational purposes only. They do not constitute legal or financial advice nor do they necessarily reflect the views of Holland & Hart LLP or any of its attorneys other than the author. This publication is not intended to create an attorney-client relationship between you and Holland & Hart LLP. Substantive changes in the law subsequent to the date of this publication might affect the analysis or commentary. Similarly, the analysis may differ depending on the jurisdiction or circumstances. If you have specific questions as to the application of the law to your activities, you should seek the advice of your legal counsel.
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