5. Power and Duties of Trustee

5. Powers and Duties of the Trustee

The Trustee shall have the following powers and responsibilities:

[Copied chapter from concise trustee book, and had chatGPT summarize.]

Powers of Trustees:

  1. General Powers:
    • Inherent in trustees due to their official position and conferred by law.
  2. Special Powers:
    • Derived specifically from the trust instrument.
  3. Discretionary Powers:
    • Arise out of necessity for personal judgment.
    • Can also be conferred by law or the trust instrument.
  4. Specific Examples of Trustee Powers:
    • Binding the trust in contracts, including those implied by law.
    • Managing trust property (e.g., selling, leasing, pledging, or mortgaging).
    • Issuing or altering trust securities.
    • Providing for the beneficiaries’ needs.
    • Prosecution and defense in legal matters.
    • Making gifts from trust property.
    • Delegating non-essential powers.
    • Exercising judgment and personal discretion unless restricted.

Duties of Trustees:

  1. Fundamental Fiduciary Duties:
    • Trustees are bound by a correlative duty for every power they exercise.
  2. Specific Trustee Duties:
    • Supporting beneficiaries’ essential needs using available trust funds.
    • Acting in good faith and avoiding misuse of their position or special knowledge.
    • Preserving and protecting trust property.
    • Taking necessary actions to defend or assert the trust’s interests.
  3. Administrative Responsibilities:
    • Keeping detailed minutes and accounts of trust activities.
    • Managing and documenting financial transactions meticulously.
  4. Investment Duties:
    • Investing funds securely to preserve capital for the remainderman.
    • Ensuring investments yield a reasonable income for life beneficiaries.
  5. Co-Trustee Collaboration:
    • Acting in concurrence with co-trustees unless explicitly authorized to act independently.

This outline emphasizes the dual responsibility of trustees to manage the trust with both diligence and a high standard of ethical behavior while adhering strictly to the terms of the trust instrument and relevant laws.