On behalf of Richard A. Lewis posted in Estate Planning on Tuesday, August 23, 2016.
As someone who is thinking about setting up a trust in his or her estate plan, or may have already set up a trust, you may be wondering what a “fiduciary duty” means in this context. This is a very important legal duty that the trustee (the person you will name as the administrator of the trust) will owe to you as well as any beneficiaries of the trust. In fact, there is more than one type of duty a trustee owes to the trust.
The importance of this fiduciary duty cannot be stressed enough. Compare this to the lawyer and client relationship. The lawyer owes a fiduciary duty to his or her client. You can see how important the role is and how breaking the duty could lead to serious consequences.
That is why the role of trustee is so important. For some people this duty as trustee is bestowed upon a lawyer. Others assign the role to a close family member or friend who they trust.
So what are some of these duties? Under California Probate Code, here are just some of them:
- Trustee must properly administer the provisions of the trust as the instrument states.
- Trustee must administer the trust in a way that is in the best interests of the beneficiaries.
- When there are two or more beneficiaries, the trustee must be impartial two all parties.
- The trustee must not act in a way or administer the trust in a way that profits him or her.
- The trustee must act a reasonable way to keep the trust productive.
These are just some of the many duties a trustee has under California law. This can be very complicated if a trust has significant assets and is complicated as well. That is why it is imperative that you seek the help of a seasoned estate planning attorney who can help with some of your questions and concerns about trusts, trustees and the fiduciary duty.