West Palm Beach Trustees Guide: What Fiduciary Duties Does Your Trustee Owe?

Were you recently made a beneficiary of a West Palm Beach trust?  Did you know that the trustee owes you certain duties? What happens when these duties are breached? Check out our crash course guide on fiduciary duties of a West Palm Beach trustee. Concerned about a breach, talk to an experienced Palm Beach probate litigator before it is too late!

Fiduciary Duties Generally

• In general a trustee is a fiduciary to the beneficiaries of a trust.
• This means they do not do business at arms length, they have to be looking out for the beneficiaries interests.
• It is easy to think of fiduciary duties in three large areas: the duty to earmark /administer, the duty to act prudently and finally the duty of loyalty.
• Do you know what these duties mean?

Duty to Earmark and Administer the Trust

• A trustee may be the legal owner of trust property but he may not co-mingle them with his own assets.
• Thus there is a duty to earmark assets, keep them separate and distinct from other trusts and the trustee’s personal assets.
• There is also a duty to make the trust productive in other words to administer it.

Duty to Invest Prudently

• A trustee should invest trust property in a way that an ordinarily prudent investor would.
• Failure to invest prudently and reasonably may result in a trustee being sued for breach.
• The entire portfolio taken as a whole should be reasonable and prudent.
• In other words a risky investment is not per se a breach if the rest of the portfolio has limited risks.

Duty of Loyalty

• Arguably one of the most important of the duties of a West Palm Beach trustee is the duty of loyalty.
• A trustee may not self deal.
• Do you know what means?
• The actions of a trustee cannot be self-motivated even if they are beneficial to the trust and its beneficiaries.
• Watch out your trustee cannot loan him or herself trust property unless the trust states otherwise.
• When a trustee acts with selfish intent that benefits the trustee, the beneficiaries may be able to sue and trace the benefit.
• The benefit will then be given back to the trust.