What are the duties of a Trustee?

Trustee’s Duties

In California, a trustee has a fiduciary duty to act in the best interests of the beneficiaries, including duties of loyalty, impartiality, and prudent management of trust assets, while also maintaining accurate records and ensuring compliance with the trust terms and tax obligations. 

Here’s a more detailed breakdown of a California trustee’s duties:

Core Fiduciary Duties:
  • Duty of Loyalty:

    The trustee must always act in the best interests of the beneficiaries, avoiding any self-dealing or conflicts of interest. 

  • Duty of Impartiality:

    When there are multiple beneficiaries with potentially conflicting interests, the trustee must act impartially, considering the needs of all beneficiaries. 

  • Duty to Administer the Trust:

    The trustee must administer the trust according to its terms and the California Probate Code. 

  • Duty to Account to Beneficiaries:

    Trustees must keep the beneficiaries reasonably informed about the trust and its administration, including providing regular accountings of the trust assets and how they have been used. 

  • Duty to Act Prudent:

    Trustees must act with due care, skill, and diligence in managing the trust assets, making investments that are reasonable and prudent. 

Specific Duties:
  • Asset Management:

    Trustees must manage trust assets prudently, making them productive and ensuring they are used effectively for the beneficiaries’ benefit. 

  • Keeping Trust Assets Separate:

    Trustees must keep trust assets separate from their own property and ensure they are properly designated as trust property. 

  • Records Management:

    Trustees must maintain accurate records of all trust transactions, including financial statements, receipts, and communication logs. 

  • Enforcing or Defending Claims:

    Trustees have a duty to take reasonable steps to enforce or defend claims related to the trust property. 

  • Tax Compliance:

    Trustees are responsible for filing and paying taxes on behalf of the trust, ensuring compliance with all relevant tax laws. 

  • Asset Distribution:
    Trustees must distribute trust assets according to the terms of the trust and the California Probate Code.