What are the fiduciary duties of a DC trustee?
When you appoint a trustee, you are placing a great deal of confidence in this person to manage the trust assets. A trustee holds a great deal of power because the trustee holds legal title to the property within the trust. It is very important that a trustee understands his fiduciary duties under the terms of the trust and Washington DC trustee laws. A DC trust administration attorney can assist trustees in understanding their fiduciary duties as a trustee.
What is a Fiduciary?
A fiduciary is a legal relationship between two or more people with the fiduciary having a duty of loyalty, a duty of care, and a duty of good faith. A fiduciary has the highest standard of care to carry out duties in the best interest of the people the fiduciary is serving. It is a relationship of confidence and faith between the fiduciary and the principal or beneficiaries.
Fiduciary Duties of Loyalty, Care, and Good Faith
A fiduciary is an individual who has the utmost confidence of the person the fiduciary is serving. When you appoint a trustee, you are placing your trust in that person to protect and manage the property and money under the control of the trustee. The trustee is expected to manage the property or money in a manner that benefits you or the beneficiaries of the trust as described in the trust agreement.
A trustee’s duty of loyalty means that the trustee will take the utmost care to avoid any conflicts of interest that could jeopardize his ability to act in your best interest. A trustee must take steps to avoid personal economic conflicts when managing the assets of the trust. The trustee should not personally benefit from the decisions he makes regarding the assets and property held by the trust. Violating the duty of loyalty usually involves making decisions that are in the best interests of the trustee without thought or concern as to how those decisions will impact the trust or the beneficiaries.
The duty of care involves making decisions based on sound business principles and acting in a reasonably prudent manner when managing the assets of the trust. A trustee has the duty to make decisions that preserve the assets and property or increase the value of the trust assets. However, decisions that result in a loss of value or profit may not be a violation of the duty of care. A violation of this duty usually involves gross negligence.
The trustee’s duty of good faith requires the trustee to make conscious decisions that further the best interests of the beneficiaries of the trust. The trustee’s actions should reflect his mindful regard for his duties as a trustee. A breach of the duty of care usually involves actions that reflect an intentional disregard for the best interest of the beneficiaries or an intentional dereliction of duties.
Additional Fiduciary Duties of a DC Trustee
In addition to having a duty of loyalty, care, and good faith, Washington trust laws impose several other fiduciary duties on trustees. For example, a trustee has a duty to maintain and furnish records of the trust to the beneficiaries. In addition, the trustee must keep beneficiaries reasonably informed about the administration of the trust. He must respond to a beneficiary’s request for information promptly.
By law, the trustee must notify beneficiaries within 60 days of accepting the appointment as trustee of the existence of the trust and the trustee’s information. In addition, the notice should provide information to the beneficiary that is necessary for the beneficiary to protect his or her interests.
Contact a DC Trust Administration Attorney for Help
DC laws governing trustees are complex and detailed. The laws and the terms of the trust may impose other duties on a trustee. A DC trust administration attorney can help a trustee understand these duties. Contact Thienel Law, LLC today for assistance with your estate planning or administration needs. Estate-planning and administration attorney Steve Thienel is dedicated to assisting clients in Maryland, Virginia, and throughout the DC Metro area and can provide legal advice and guidance to the trustee as he fulfills his fiduciary duties so that he can avoid allegations of a breach of fiduciary duty.