trustee duties Flashcards
when does duty of prudence apply
investing
VA uniform prudent investor act
trustee must invest and manage trusts like a prudent investor would
reasonable case skill and caution
what if a trustee has specialized expertise?
duty to use that expertise
duty to diversify
must diversify unless trustee reasonably believes that the purposes of trust are better served without doing so
duty of impartiality
uniform principal and income act
trustee must balance interests of present and future beneficiaries
general trustee duties
comply with trust instrument and VA law
loyalty
impartiality
prudence
duty of loyalty
admin trust solely for interests of Bs
what if a conflict arises b/w T duties and T personal interests?
voidable by B
other duty of loyalty violations
commingling property or funds
can trustee be compensated out of trust assets?
yes if fair to Bs
if the uniform principal and income act mandatory?
default rule
trust terms may alter
under the duty of impartiality, how does the trustee allocate T commission?
half from principal
half from income
under the duty of impartiality, how does the trustee allocate ordinary expenses like interest pmts?
income
under the duty of impartiality, how does the trustee allocate capital expenses?
principal
remedies for trustee breaching
compel T to perform
injunction
compel T to pay
suspend/remove T
deny T compensation
duties to other trustees
each trustee must act in reasonable care to prevent coT from committing serious breach and compel coT to redress issue
jointly and severally liable for other’s actions if they dont
is a trustee liable if they enter into a k and disclose their fiduciary capacity?
no
Statutory trustee removal
material change in circumstances
requested by all Bs
serves best interests of all Bs
Common law trustee removal
1) breach of trust,
2) inability to work with other co trustees
3) failure to administer trust; or
4) lack of trust
