Estate Planning Newsletter

What are the Duties of a Trustee?

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.

© 2025 NextClient.com, Inc. All rights reserved.

• Donations of Property and Tax Deductions
  The U.S. government has long encouraged citizens to contribute to charity. One method of encouraging philanthropic giving is the allowance of deductions from income for federal tax purposes for donations to “qualified”... Read more.
• Affixing a Value on an Estate
  Assets owned by a person at the time of their death, whether real or personal property, is commonly referred to as the decedent’s “estate.” After the person dies, the property or proceeds from the sale of such property... Read more.
• Procedure for Removing an Executor or Administrator
  State laws and procedures typically govern the administration of an estate. For this reason, the law varies among jurisdictions. However, in 1969, a “Uniform Probate Code” (Uniform Code) was introduced. Since that time,... Read more.
• Valuing an Interest in a Company for Estate Tax Purposes
  In 2001, Congress passed legislation incrementally increasing the amount exempt from federal estate taxes and completely eliminating estate taxes in the year 2010. However, the legislation contains a “sunset” provision... Read more.

• High School Graduate Sues Her School District Because She Graduated Without Learning How to Read or Write
• Trump Administration Revokes Over 300 Student Visas Amid Activism Crackdown
• Director Carl Erik Rinsch Charged With Wire Fraud, Money Laundering, and Defrauding Netflix of $11 Million
• South LA-based Rollin’ 60s Crips Leader Eugene Henley Jr. Charged in RICO Complaint Alleging Racketeering Crimes With 18 Others
• Texas Man Who Planned Mass Murder Attacks Sentenced to 6 ½ Years in Federal Prison