![]() The trustee is expected to know and understand what their duties are when accepting the trustee position. A trustee may find herself liable if she violates an express or implied duty set forth in the trust whether the violation was in good faith, bad faith, due to negligence, forgetfulness, oversight, etc. Again, a trust cannot read “trustee X guarantees Y returns on trust investments over Z period of time,” but if there is a substantial decrease in the value of retained stocks and it was found that the trustee failed to attend stockholder meetings, perform adequate due diligence, or follow the value of said stocks on the stock market the trustee may be held liable. The distinction between an honest mistake and breach of trust is often determined by the expressed duties set forth in a trust. A trustee cannot be considered insurance against poor market results and making a reasonable mistake should not land a trustee in legal action. While there is a lot of room for interpretation, the trustee will usually not be held liable for losses if he or she exercised reasonable caution, skill, knowledge and did not abuse his or her discretionary powers. Many cases against a trustee involve beneficiaries who feel the trust estate has lost value or not grown as anticipated. Duty of Impartiality: The trustee must treat all the beneficiaries equally.Duty of Care: The trustee must manage the estate in accordance with the law and the guidelines set forth in the trust.Duty of loyalty: The trustee must act solely in the interest of the beneficiaries. ![]() Generally, a trustee’s fiduciary duties can be simplified into three categories: How is one to know if there has been a breach of fiduciary responsibilities? Ultimately it will be the court’s decision if the case is brought to trial. However, every case is different and if you as a beneficiary feel action needs to be brought against your trustee, or conversely if you’re a trustee who feels the legal action brought against you is erroneous, seeking the guidance of a qualified attorney is highly suggested. If the trustee makes informed decisions, exercises caution when appropriate, follows the guidelines set forth in the trust and takes his or her fiduciary responsibilities seriously, it is unlikely that the trustee would be liable for breach of trust. The trustee is obligated to carry out the terms of the trust in good faith and to the best of his or her abilities within reason. These responsibilities can be as simple as making sure the estate’s assets are properly disbursed among the beneficiaries, or as complex as overseeing the continued financial success of stocks, assets, investments, etc. This individual or entity will be tasked with following the responsibilities set forth in the trust. When drafting a trust, choosing the right trustee is a very important decision. In this article, we’ll discuss a trustee’s responsibility and fiduciary duties, examples of breach of duties, and the possible remedies ordered by the court against the trustee. ![]()
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