Fiduciary & Trust Section #6 Accounting & Compensation

Question 1

Duty to keep records

Answer 1

Fiduciaries required to keep adequate records of fiduciary activities

Best practice and connected to duty to provide information to beneficiaries

Question 2

Duty to furnish information to beneficiaries

Answer 2

Trustee must give beneficiaries complete and accurate information regarding: trust assets

If requested by beneficiary and request is reasonable

May disclose to “ representative group of beneficiaries “

Question 3

Secret Trust

Answer 3

Created under Delaware state law

Beneficiaries right to info completely waived

Question 4

Duty to furnish info - revocable trusts

Answer 4

If settlor has capacity, only duty is to them

Question 5

Duty to furnish info to beneficiaries under UTC Section 813

Answer 5

• keep beneficiaries informed during administration
• promptly respond to any beneficiary requests for info
• provide entire trust document
• within 60 days of accepting trusteeship, notify beneficiaries and provide contact info

Question 6

Duty to render court accounting

Answer 6

May be waived in will or trust document

Must provide annual accounting to beneficiaries that request them

Certain interested parties can petition court to make trustee provide accounting

Question 7

Fiduciary compensation

Answer 7

Fiduciaries entitled to “ reasonable compensation”

Consider facts and circumstances of actual duties performed

Can be modified by agreements with beneficiaries

Question 8

Breach of fiduciary duty - compensation effects

Answer 8

May results in partial or total loss of compensation

Trustee may have to pay back compensation taken

Punitive damages also possible