![]() Any commingling or misappropriation of trust funds is strictly prohibited by law, though it remains alarmingly common. To help prevent conflicts of interest, trustees also have a duty to keep trust assets separate from personal assets. The fact that the trustee is acting as both the seller and the buyer makes such a transaction inherently suspect, even (and especially) when the trustee is also a beneficiary. A common example is when a trustee sells trust assets to themselves. The trustee must also avoid and disclose any conflicts of interest. As a fiduciary, a trustee is legally bound to base all decisions regarding trust assets on what is best for the beneficiaries and in keeping with the stated or implied intentions of the trust document. ![]() A trust’s creator often appoints themselves as their own trustee during their lifetime, and names a successor trustee to take over after they have passed.įirst and foremost, the trustee has a duty of loyalty. The trust’s creator is sometimes called a grantor, settlor, donor, trustor, or trustmaker. A trust differs from a will in that it takes effect as soon as it is legally created, rather than upon the creator’s death. A trustee must always act in the best interests of the trust beneficiaries. ![]() Trustees have many duties under the law, and failing to live up to any of them may provide grounds for a beneficiary to file a lawsuit.Ī trustee is a person nominated by a trust document to manage assets owned by another person or their estate. Trustee malfeasance is a broad term encompassing many different types of offenses, both intentional and unintentional. ![]() Trustee malfeasance refers to any type of negligent, self-serving, erroneous, or retaliatory conduct committed by the trustee of a trust resulting in harm to trust assets or beneficiaries. ![]()
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