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The fiduciary duties of a trustee

On Behalf of | Oct 10, 2024 | Estate And Trust Litigation |

A trust is a legal tool used to manage assets. Generally, the settlor (the person who creates the trust) uses it to pass assets onto beneficiaries. The individual tasked with managing the assets in a trust and carrying out its functions is the trustee.

Trustees hold a very important position, and they have fiduciary duties. In a nutshell, fiduciary duties mean acting in the best interests of the beneficiaries. However, below is a more in-depth overview of the fiduciary duties of a trustee.

The duty to act in good faith

Honesty is at the center of all fiduciary roles. A trustee must always communicate openly and act with integrity. Hiding important information from beneficiaries and other interested parties could amount to a breach of fiduciary duty.

The duty of loyalty

Being a trustee can be hard work. It is a huge responsibility that requires time and effort. The trustee must be prepared to put in this effort and remain loyal to beneficiaries at all times.

The duty to be diligent

Trust often involves managing assets that are worth significant amounts. A trustee must exercise due caution when making investments or moving money to the appropriate parties.

No self-dealing

Self-dealing is one of the worst breaches of fiduciary duty. This occurs when a trustee uses assets to make a personal profit. Making a personal profit from trust assets is a conflict of interest and most certainly a breach of fiduciary duty.

If you believe that a trustee has not acted appropriately, then you can raise a legal challenge. Seeking further guidance will help you to assess the best way to do this.