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Duties of a Trustee

When the grantor of a revocable living trust becomes incapacitated or passes away, someone else must take charge of the financial matters. If an irrevocable living trust has been signed, the role of the outside trustee begins immediately. The job of a trustee usually requires a hefty investment of time and comes with several important fiduciary duties:

Duty to follow the terms of the trust

By accepting this position, a trustee is obligated to fulfill the grantor’s intentions as stipulated in the trust agreement.

Standard of care requires skill and caution

A trustee has a duty to exercise the same degree of care that reasonably prudent people would use in handling their own property. Any personal deficiencies of a trustee do not reduce the minimum degree of skill required.

Duty of loyalty to all beneficiaries

The trustee has an absolute duty of loyalty to the beneficiaries. The interests of the beneficiaries must come before the trustee's own interests, and the trust must be administered solely for their benefit. It is especially important that the trustee avoid any self-dealing transactions for personal gain.

Duty to secure and safeguard property of the estate

Securing and safeguarding trust property may involve managing, transferring and/or selling real estate, distributing tangible personal property to the rightful new heirs, and safeguarding other assets, including cash and investments. The trustee must also enforce any rights or claims the trust has against third parties.

Duty to account

The duty to account requires the trustee to keep accurate records and perform regular accountings to the beneficiaries and to the court.

Duty to segregate and identify assets

The trustee must separate trust assets from their own assets and keep them earmarked as part of the trust. The trustee can be held liable for any loss of property due to the trustee's failure to undertake these steps. 

Duty to prudently invest and keep trust property productive

This duty requires the trustee to make each asset productive. Here the trustee is obligated to manage the assets so that the interests of the beneficiaries are preserved.

If you have been appointed trustee or are looking to establish a trust, an experienced Florida estate planning and trust administration lawyer can provide valuable guidance.

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