The following is an overview of the fiduciary duties of a trustee of a trust.
1. Duty to administer trust (Prob C §16000)
The trustee has a duty to follow the terms of the trust and the law governing the administration
of trusts.
2. Duty of
loyalty (Prob C §16002)
The trustee has a
duty to administer the trust exclusively for the benefit of trust
beneficiaries.
3. Duty of
impartiality (Prob C §16003)
The trustee has a
duty to not favor the interests of one beneficiary over another, except if the
trust provides otherwise.
4. Duty to
avoid conflict of interest (Prob C §16004)
The trustee has a
duty to avoid transactions that benefit the trustee personally.
5. Duty not to
require beneficiary to relieve trustee of liability (Prob C §16004.5)
The trustee cannot
require a beneficiary to waive their rights as a condition of distribution.
6. Duty to not
undertake adverse trust (Prob C §16005)
The trustee may
not act as trustee of any other trust that has a competing interest with this
trust.
7. Duty to take
control of and preserve trust property (Prob C §16006)
The trustee must
gather trust assets and take reasonable steps to preserve them.
8. Duty to make
trust property productive (Prob C §16007)
The trustee has a
duty, subject to certain qualifications, to make the trust assets profitable.
9. Duty to keep
trust property separate and identified (Prob C §16009)
The trustee has a
duty to keep the assets and debts of the trust separate from the trustee own.
In other words, the trustee should not commingle funds.
10. Duty to
enforce claims (Prob C §16010)
The trustee must
take reasonable actions to pursue assets that may be owed to the
trust.
11. Duty to
defend actions (Prob C §16011)
The trustee has
the duty to take actions to prevent a loss to the trust, such as by defending a
lawsuit.
12. Duty not to
delegate (Prob C §16012)
Subject to certain
exceptions, the trustee must perform actions on behalf of the trust rather than
having others act on behalf of the trust.
13. Co-trustee
Duties (Prob C §16013)
If the trustee
serves along with a co-trustee, then each trustee has a duty to participate in
the administration and prevent the other from committing a breach of the trust.
14. Duty to use
special skills (Prob C §16014)
In managing the
trust property, the trustee must use at least ordinary business ability.
However, if the trustee has special skills, the trustee will be held to a
higher standard of care.
15. Duty to
provide information to beneficiaries (Prob C §§16060-16064)
The trustee has a
number of duties related to providing financial and other information to beneficiaries.
16.
Discretionary powers to be used reasonably (Prob C §§16080-16081)
Even if the trust
provides that a particular action is entirely within the trustee's discretion,
the trustee has a duty to act reasonably in exercising that discretion.
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If the trustee
then breaches of these aforementioned duties, they are subject to removal.
