The Fiduciary Duty of a Trustee
When you select someone as a successor trustee, you expect that person to handle your trust property in accordance with your wishes and to take proper care of your beneficiaries. However, since the successor trustee takes over after your death or if you become incapacitated, how do you ensure that the trustee is doing their job?
Fortunately, every trustee has a fiduciary duty to the beneficiaries of a trust, which is the highest legal duty. This means that trustees cannot use their position of authority when it comes to the trust property for their own benefit or to cause harm to any beneficiaries. Some aspects of this fiduciary duty include:
- Duty of care – Managing the trust property with reasonable care, prudence, and skill to avoid losses.
- Duty of loyalty – Acting in the best interests of all beneficiaries and without bias toward certain beneficiaries to the detriment of others. Also, avoiding any self-dealing transactions to benefit themselves.
- Duty to account – Keeping accurate records of all transactions, investments, distributions, and other accounting, and then keeping beneficiaries informed of the accounting changes.
Trustees also must keep all trust property separate from their own, and distribute the property as instructed in the trust document.
If a trustee fails to properly manage the trust property, acts with bias, or otherwise violates their fiduciary duty, beneficiaries can suffer harm. Trust beneficiaries can take legal action to hold a trustee liable for any losses or waste they caused, as well as any self-serving benefits the trustee received from their position.
Contact a Trust Administration Lawyer in Pleasanton, CA
At the law firm of Randick O’Dea & Tooliatos, our Pleasanton trust administration attorneys help advise trustees, as well as represent beneficiaries harmed by a trustee who breached their fiduciary duty. If you have any concerns about trust administration, please call 925.460.3700 or contact us online today.