If you are considering setting up a trust, or you are the beneficiary of a trust, it is important to understand the role of the trustee. The trustee is the individual or institution that holds and manages the assets of the trust. The main duties that a California trustee must perform are below:
Duty to Inform and Account
The trustee has a duty to keep the beneficiaries informed about the trust property and how it is being managed. The trustee must also provide a formal accounting to the beneficiaries at least once a year. This accounting should detail all income and expenses related to the trust assets.
Duty of Loyalty
The trustee must act in good faith and in the best interests of the beneficiaries at all times. This means that the trustee cannot use the trust property for his or her own benefit. For example, the trustee cannot make investments with trust funds that would result in a personal profit.
Duty of Care
The trustee has a duty to exercise care when managing trust property. This includes investing trust funds in a way that will preserve capital and grow income. The trustee should also take steps to protect trust property from loss, such as by insuring valuable assets.
Duty to Follow the Terms of the Trust Agreement
The trustee must follow the terms of the trust agreement when managing trust property. This includes carrying out any specific instructions that are laid out in the agreement. For example, if the trust agreement says that certain assets must be sold by a certain date, then it is the trustee’s responsibility to make sure that this happens.
Navigating Trustee Obligations in California and Seeking Legal Action as a Beneficiary
As you can see, there are several important duties that a trustee must perform in California. If you are considering setting up a trust, it is essential that you choose someone who you can trust to fulfill these duties. An experienced estate planning attorney can help you select an appropriate trustee and draft a comprehensive trust agreement. If you are a beneficiary of a trust, and you are concerned that your trustee is violating their duties, you may have legal recourse. Contact Albertson & Davidson, LLP for a free case consultation.
