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Becoming a Trustee

 

Becoming a Trustee and what you should know.

Trusts are legal documents created by a Trustor that instruct the distribution of assets. The Trustee of a trust is the person appointed to carry out the Trustor’s instructions. Beneficiaries are the people that ultimately get the assets or the equivalent to wind up the Trust. The Trustee protects the interests of the beneficiaries of the Trust.

Becoming a Trustee 

Trusts are legal documents created by a Trustor that instruct the distribution of assets. The Trustee of a trust is the person appointed to carry out the Trustor’s instructions. Beneficiaries are the people that ultimately get the assets or the equivalent to wind up the Trust. The Trustee protects the interests of the beneficiaries of the Trust.

A living trust is one that keeps control of the assets during the Trustor’s life. The control passes to a named trustee at death. The Trustee must gather all the property of the estate, i.e., secure all assets. 

The Trustee is a legal owner of the trust property, and the beneficiaries become the beneficial owners. The distinction is that the Trustee can control the assets and carry out the trust instructions. The Trustee must take care not to break the rules or exceed the authority granted by the Trust.

Who Can Be a Trustee?

Under California law, a trustee can be any person 18 years of age or older, a U.S. citizen, and of sound mind. In many cases, the first or initial Trustee is the person making the Trust. Upon his or her death or by choice, a named substitute trustee takes charge. The question of who can be a trustee differs from the issue of who should be a trustee. The role requires maturity, knowledge, and a willingness to expend the necessary level of effort. 

What is the Role of a Trustee?

Under California law, a trustee is appointed by the Trust’s creator, i.e., Trustor, Grantor, Settlor. The Trustee’s role is to carry out the instructions of the Trust. 

Questions to Ask Before Becoming a Trustee

When asked or designated to become a trustee, you should ask some questions about the Trust and the nature of the assignment. The items below are questions to ask before becoming a trustee.

 • What is the role of a trustee, and how much time will it take?

 • Can a single trustee do the job?

 • What are the fees and arrangements for expense reimbursements?

 • Who are the persons involved as beneficiaries?

 • Who are some persons that can be successor trustees?

Trustee Duties Under California Law

The legal duties of a trustee of a trust in California are significant. They impose obligations and legal responsibility. The below-listed items describe the duties of a California trustee.

 • Must Be Loyal – The Trustee must always be loyal to the beneficiaries and act for the benefit of the Trust. The Trustee must still place the interests of the beneficiaries above his or her interests. The Trustee may never use his or her position to gain an advantage over or cause detriment to the beneficiaries. 

 • No Conflicts of Interest- The Trustee must be loyal to the Trust. His or her judgment must be free of personal interests that are at odds with the Trust. The Trustee must avoid self-dealing or acts that interfere with duties owed to the beneficiaries.

 • Must Be Fair – The Trustee is accountable to the beneficiaries, and when there is more than one beneficiary, the Trustee must be impartial and act without favoring one or another. The Trustee must be neutral when performing acts such as investing, selling assets, or otherwise managing the assets. This duty can be challenging, particularly when the beneficiaries may have different or competing interests.

 • Must Inform – The Trustee must keep the trust beneficiaries informed of their actions to carry out the trust instructions. The Trustee must disclose information that beneficiaries might need to protect their interests in the trust assets.

 • Cannot Delegate Duties – Trustees usually must perform duties directly and not by delegating to other persons. The Trustee should expect to perform tasks that he or she is generally capable of performing. The law prohibits giving trustee powers to other persons. The Trustee can hire experts, and an attorney might be essential to good faith performance by a trustee.

 • Must Not Commingle Assets – California law requires a trustee to avoid mixing personal and Trust assets. The rule against co-mingling assets is an essential duty. An interested party can seek strict enforcement of this provision, and a trustee should avoid any appearance of co-mingling assets with trust property. 

 • Must Enforce Rights – The Trustee must enforce the Trust’s rights and defend claims on trust assets. The law does not require trustee action on every claim; they must act as a prudent trustee under similar circumstances. 

Legal Advice

When deciding whether to accept an appointment as a trustee, you should take time to consider the responsibilities, duties, and risks. When a trustee fails to meet the law’s requirements, there can be a breach of Trust. Beneficiaries and other persons with interest may take legal action against the Trustee. In some cases, the Trustee may face personal liability. 

 Whether you are new to the role of Trustee under state law or familiar with the duties and responsibilities, you can benefit from an experienced trust and estate legal professional’s advice. You can carefully discuss the expectations of the Trust, beneficiaries, and maker of the Trust. Working with an attorney, you can ask questions and carefully review any risks or exposures to personal liability.

The advice of an experienced attorney can help to decide to accept or reject a trustee assignment. The assistance of legal counsel can guide all stages of the Trustee’s responsibilities.

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