A trustee of a California trust has numerous responsibilities and duties. The primary task of the trustee is to manage the trust assets, but with this job comes many obligations. If you have been appointed as the trustee of a trust, it is wise to obtain legal help to ensure that you properly fulfill all of your duties.
The extent of a trustee’s duties and powers are determined by the trust document and applicable laws. Failure to follow the trust terms or the law without a valid excuse may constitute a breach of the trust. California law outlines the duties of a trustee, but below is a summary of each:
Duty of Loyalty
A trustee must act in the best interests of the beneficiaries. This includes a requirement that the trustee never place his/her own interests about those of the beneficiaries. The trustee is prohibited from using his/her power for an advantage to the detriment of the beneficiaries.
Duty to Avoid Conflicts of Interest
A trustee’s duty to avoid conflicts of interest helps ensure that the trustee does not breach the duty of loyalty. In other words, the trustee must avoid activity that involves self-dealing, personal conflicts with the interests of the trust and conflicting fiduciary duties.
Duty of Impartiality
The trustee cannot favor one beneficiary over the others. The trustee must also act impartially in investing and managing trust property, while at the same time considering the differing interests of the beneficiaries.
Duty of Disclosure
A trustee must keep trust beneficiaries reasonably informed and disclose all material facts necessary to protect the beneficiary’s interests in the trust.
Duty Not to Delegate
The trustee is prohibited from delegating trust tasks that the trustee is reasonably capable of performing. A trustee also cannot transfer his/her authority to others. It is important to note that this duty does not prohibit a trustee from employing an attorney when appropriate.
Duty to Keep Trust Assets Separate
A trustee cannot co-mingle trust assets with his/her own assets. All property held by the trust should be identified and kept separate.
Duty to Enforce or Defend Claims
The trustee must enforce claims that a prudent trustee would take steps to enforce in similar circumstances. In other words, a trustee is not required to enforce every claim, only those that are deemed cost-effective and likely to succeed. The trustee must also defend claims that may result in a loss to the trust.
If you have been appointed to administer a trust, you are responsible for completing several tasks, and there is little room for error. Don’t despair. We have helped hundreds of people in your situation. Just call to schedule your no-cost consultation: (714) 963-7543. We can minimize your stress, reduce exposure to personal liability and guide you through an orderly process. At The Legacy Lawyers, we are dedicated to your peace of mind.