What are at least 5 duties of a trustee?
Asked by: Prof. Carmine Kiehn II | Last update: February 20, 2026Score: 4.3/5 (41 votes)
A trustee's core duties involve loyalty to beneficiaries, prudent management and investment of assets, impartiality among beneficiaries, following the trust's terms, and providing clear accounting and information about the trust. They must act in good faith, avoid self-dealing, protect trust property, and ensure distributions are made as directed, all while maintaining detailed records and communicating with beneficiaries.
What are the duties of a trustee?
A trustee's primary responsibility is to manage trust assets for the beneficiaries' benefit, adhering strictly to the trust document and the law, requiring duties like prudent investment, detailed record-keeping, impartial decision-making, tax compliance, and transparent communication, with potential personal liability for breaches of this high fiduciary duty. Key actions include overseeing investments, making distributions, filing taxes, maintaining records, and acting solely in the beneficiaries' best interests, avoiding self-dealing.
What is the first thing a trustee should do?
The first duties of a successor trustee are to find the trust document, tell the beneficiaries about the trust, make a list of the trust property, protect the trust property, and manage the trust property. These duties are essential to the proper administration of a trust.
What power does a trustee have?
The trustee has the power to acquire or dispose of property, for cash or on credit, at public or private sale, or by exchange. 16227. The trustee has the power to manage, control, divide, develop, improve, exchange, partition, change the character of, or abandon trust property or any interest therein.
What are the 5 fiduciary duties?
A fiduciary duty involves taking actions in the best interests of another person or entity. Fiduciary duty describes the relationship between an attorney and a client, or a guardian and a ward. Fiduciary duties include duty of care, loyalty, good faith, confidentiality, prudence, and disclosure.
Five Duties Of A Trust’s Trustee
What does a trustee violate fiduciary duties?
Trustees and executors are bound by fiduciary duties that require them to act in the best interests of the beneficiaries, exercising loyalty, care, impartiality, and disclosure. Indicators of fraud or breach of fiduciary duty include unusual beneficiary changes, delayed trust administration, or commingled funds.
What are the five fiduciary duties in real estate?
Everything Agents Should Know About Fiduciary Duties
- The duty of obedience. The duty of obedience requires the agent to follow the instructions of the client and to act in accordance with the client's wishes. ...
- The duty of loyalty. ...
- The duty of disclosure. ...
- The duty of confidentiality. ...
- The duty of accounting.
What can a trustee not do?
A trustee cannot use trust assets for personal gain, favor one beneficiary over another, mix trust property with personal assets, or ignore the trust document's terms; they must act impartially, avoid conflicts of interest, provide clear accounting, and manage assets prudently in the beneficiaries' best interest, otherwise facing personal liability.
What are the 6 duties of a trustee?
The 6 main responsibilities of a charity trustee are to ensure your charity carries out its purposes for the public benefit, comply with your charity's governing document and the law, act in its best interests, manage your charity's resources responsibly, act with reasonable care and skill and ensure your charity is ...
What are common trustee mistakes?
Common trustee mistakes involve failing to read and follow the trust document, poor record-keeping, inadequate communication with beneficiaries, self-dealing or conflicts of interest, delaying administration, and not seeking professional help, all leading to potential financial loss and legal liability for the trustee. Key errors include mixing trust funds with personal money, failing to keep beneficiaries informed, and not understanding the grantor's intentions, emphasizing the need for strict adherence to fiduciary duties.
Can a trustee take everything?
Even if you do have some nonexempt property — meaning it isn't fully protected — the trustee won't automatically take it. They usually only go after assets that are valuable enough to justify the time and cost of selling them.
How long should you be a trustee?
How long do trustees serve? The length of a charity trustee appointment will be in your constitution but, in general, most charities opt for 3 years, with the option to reappoint.
What are the disadvantages of a trustee?
Trustee shortcomings often involve breaches of fiduciary duty, such as mismanaging assets (poor investments, lack of maintenance), failing to account for funds, neglecting communication with beneficiaries, acting with self-interest (conflicts of interest), or causing delays in distributions, leading to potential personal liability, removal, and legal action, especially with insufficient understanding or a failure to follow the trust document diligently.
Can a trustee make decisions alone?
Although trustees may have the ability to make decisions on their own, doing so without consulting beneficiaries — especially when it comes to significant matters like selling trust property — can lead to conflict.
What are the six fiduciary duties?
The common law imposes six legal duties on fiduciaries. They are the duties of loyalty, obedience, disclosure, confidentiality, diligence, and accounting. With the exception of the duties of confidentiality and diligence, fiduciary duties are fairly easy to understand.
Do trustees have a duty of care?
All trustees must comply with the common law duty of care. That means they must take the precautions that an ordinary prudent person of business would take in managing similar affairs of their own.
What is the basic duty of a trustee?
A trustee has a duty of loyalty to act in the best interest of the beneficiaries and to avoid any conflicts of interest. The trustee must follow the trust terms and cannot make gifts, loans, or distributions to themselves or others unless specifically authorized under the trust document.
What makes a great trustee?
A good trustee will be able to listen to other board members, staff and the people the charity supports, and take their voices on board. While able to give challenge, they should also be willing to take on board critique themselves and be open to changing their views if the need arises.
Can a trustee withdraw money from a trust account?
Paying Administration Expenses and Debts
Trustees are generally permitted to withdraw money from a trust to pay necessary administration expenses and valid debts. These may include funeral costs, medical bills and even outstanding credit card balances.
What are the legal duties of a trustee?
The general duties of a trustee are to:
- Observe and act under the terms of the trust in accordance with the trust instrument.
- Usually provide an income for the beneficiaries and preserve the capital value of the trust.
- Take control of the trust property and take steps to safeguard it.
- Take reasonable care.
What can a trustee spend money on?
As a trustee, you can expect to pay any and all of these bills associated with the trust assets:
- Final Expenses.
- Final Medical Bills.
- Funeral Expenses.
- Utilities on real property.
- Outstanding credit card bills.
- Mortgage payments on real property.
- Income taxes.
- Estate Tax.
Who holds a trustee accountable?
“When holding a trustee accountable, the best option is to work with an attorney. Only a seasoned trust litigation lawyer will know the laws governing trusts and trustees, have experience in court, and be able to interpret the trust document.
What is the 3-3-3 rule in real estate?
The "3-3-3 Rule" in real estate typically refers to a financial guideline for home buyers, suggesting monthly housing costs stay under 30% of gross income, saving 30% for a down payment/buffer, and the home price shouldn't exceed 3 times annual income, preventing overspending and building financial security for unexpected costs, notes Chase Bank, CMG Financial, and MIDFLORIDA Credit Union. Another interpretation, Mountains West Ranches https://www.mwranches.com/blog/3-3-3-rule-a-smart-guide-for-real-estate-buyers, is for buyers to have three months of savings, three months of mortgage reserves, and compare three properties, while agents use a marketing version: call 3, write 3 notes, share 3 resources.
What is the biggest mistake a real estate agent can make?
The biggest mistake real estate agents make is failing to build strong client relationships and communicate effectively, often prioritizing quick transactions over long-term trust, leading to poor reviews and lost repeat business, alongside neglecting crucial aspects like niching down, strong online presence, and market knowledge, which hinders growth and professionalism.
What are fiduciaries not allowed to do?
Fiduciaries are not allowed to act in their own self-interest, engage in conflicts of interest, or misappropriate assets; they must always prioritize the beneficiary's best interest, meaning they cannot self-deal, steal, misuse confidential information, comingle funds, favor one beneficiary over another, or fail to provide transparent accounting and information. Actions like embezzlement, fraud, negligence, and failing to act prudently are major breaches of fiduciary duty, potentially leading to legal action, removal, and even criminal charges.