The person or entity that you have decided to be the trustee upon your death or incapacity will take control of the assets of the trust. The trustee is a fiduciary and has fiduciary responsibilities for managing the assets of the trust and following your wishes. One of the first things I tell the trustee is “IT’S NOT YOUR MONEY!” Amateur trustees have a difficult time understanding that the assets of the trust do not belong to them until they are actually distributed to them in their capacity as a beneficiary. Sometimes it is difficult for the appointed trustee, who also happens to be a beneficiary, to distinguish the two different hats they are wearing. But it is imperative that whoever is the trustee understands this concept: it is not their money and they must comply with their fiduciary obligations and with current law. The statutory duties of trustees are contained in Probate Code Sections 16000 – 16100.
Just because you are nominated to be the successor trustee of a trust, does not legally obligate you to take on that responsibility. The nominated trustee may decline to act if for some reason they do not wish to be the trustee. Many people believe that because they were nominated as a trustee, they have a legal obligation to do so. They feel that they have a moral obligation, which is a different question. Some people do not want the aggravation or the responsibility and do not wish to, or are not able to, for whatever reason to act as trustee, and will decline. In that case the next person listed as the successor trustee, if one is named in the trust instrument, will become the trustee. In practice, many people who have acted as a trustee for a friend, relative or parent, indicate that they would never do it again because of the amount of work and responsibility that is involved, and furthermore, dealing with other family members regarding the management of the trust estate, can be unnerving. Sometimes it is advisable for the creators of the trust to nominate a professional to act as trustee to avoid potential squabbles among the family.
California Probate Code Section 16000 states in part: “On acceptance of the trust, the trustee has a duty to administer the trust according to the trust instrument….”
California Probate Code Section 16002 states in part that the trustee has a duty to administer the trust solely in the interest of the beneficiaries.
California Probate Code Section 16003 indicates that the trustee has a duty to deal impartially with multiple beneficiaries and act impartially in investing and managing the trust property.
California Probate Code Section 16004 indicates that the trustee has a duty not to use or deal with the trust’s property for the trustee’s own profit or for any other purpose unconnected with the trust nor to take part in any transaction in which the trustee has an interest adverse to the beneficiary.
California Probate Code Section 16006 indicates that the trustee has a duty to take reasonable steps under the circumstances to take and keep control of and preserve the trust property.
The information in this blog post (“post”) is provided for general informational purposes only, and may not reflect the current law in your jurisdiction. No information contained in this post should be construed as legal advice from Reid & Hellyer, APC or the individual author, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through, this Post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country or other appropriate licensing jurisdiction.