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By: Scott Grossman on September 12th, 2016

Understanding the Trustee Standard of Care

When fulfilling your duties as the trustee of a trust, you are obligated to meet a certain standard of care. Unfortunately, this standard tends to change over time. This can make it very difficult for inexperienced trustees to ensure that they are meeting all of their obligations. In addition, the courts tend to construe the trustee’s standard to be very high. A trustee wants to ensure that they are carrying out their responsibilities properly. Therefore, trustees must seek guidance from an experienced professional.

Seven Tips for Meeting the Trustee Standard of Care

As you begin the trust administration process you want to familiarize yourself with a trustee’s required standard of care. Consider the following tips relating to a trustee’s required standard of care:

  1. Carefully review the general standard of trustee care as stated in the California Probate Code.
  2. Utilize reasonable care, skill, and caution as a prudent person would under the current circumstances to accomplish the purposes of the trust. The words contained within the trust will determine the purpose of the trust.
  3. You are required to use any and all skills you may possess while administering the trust. For example, if you have a background in financial investing, you must utilize those skills when handling the assets of the trust.
  4. If you can reasonably perform certain duties as the trustee, you should generally not delegate those responsibilities.
  5. When you need assistance, however, it is generally permissible to delegate responsibilities as well as duties. For example, you may utilize an experienced professional to handle some of the investment, tax, legal, and accounting-related obligations of a trustee.
  6. Whenever you opt to delegate responsibilities, however, you must use good reason and prudence when selecting which individuals to utilize. Also, you must carefully oversee these individuals. As a trustee, you are not simply freed your the responsibility of duty just because you have delegated that duty to someone else.
  7. For certain obligations such as the duty to provide a trust accounting, you must meet the rules and standards for performing this responsibility as they are outlined in the California Probate Code.

A Trustee’s Standard of Care

Additionally, if a trustee fails to meet the required standard of care, a beneficiary can demand that the trustee disclose all trust-related information. From there, the beneficiary can assess whether the trustee is failing to meet his or her obligations. If the beneficiary believes that impropriety is taking place, he or she can present this information to the court. The court will then determine whether the claim is valid. The trustee thereafter has the burden of refuting the beneficiary’s allegations by presenting evidence to the court.

Follow Up

To avoid potentially lengthy and costly court battles as aforementioned. A trustee should seek guidance from an experienced legal professional. At the Grossman Law Firm, we have helped many clients fulfill their obligations properly. We encourage you to check out the many client testimonials from those we have helped in the past.

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