Trustee Duties, Powers, and Remedies

Question 1

T duties

Answer 1

1. Loyalty
   2.Inform and account
   3.Prudent investment (care)
2. Collected and protect
3. Earmark (no commingle)
4. Bring and defend claims
5. impartiality

LIPCECI

Question 2

T’s duty of loyalty

Answer 2

1. Put B’s interests first;
2. Conflict of interest - good faith, objectively reasonable;
3. Self-dealing - no further inquiry;
4. Except when court approval or unanimous Bs;
5. Remedies favorable to deter.

BICIGOSIFECUR

Question 3

T’s duty of care / prudent investment

Answer 3

1. Reasonable person managing their own property;
2. preserve principal historically;
3. prudent investor modernly;
4. Risk/reward, inflation, diversification, B needs;
5. Deference to settlor not absolute;
6. No delegation at common law;
7. Select, instruct, and monitor modernly.

ROPHPIRIDDACSIM

Question 4

Multiple Ts

Answer 4

1. No unilateral exercise unless provided;
2. Void unless ratified.

Question 5

T’s duty to inform and account

Answer 5

1. B’s must be informed of Existence;
2. Provided with copy of trust instrument;
3. Major changes;
4. Annual accounting;
5. Accurate records;
6. Withhold okay but
7. Enough information to protect.

BETIMARWIP

Question 6

T’s duty to collect and protect trust property

Answer 6

1. Secure and protect
2. insurance
3. taxes, mortgage, maintenance;
4. intentional failure, breach of loyalty.

SITIF

Question 7

T’s duty to earmark property

Answer 7

1. Separate from their own
2. Titled accounts
3. adequate internal records;
4. not commingle
5. egregious breach must show causation

SOTARCEC

Question 8

T’s duty to bring and defend claims

Answer 8

1. Defend Res
2. valid legal claim is res
3. Bs can bring derivative claim for failure by T.

Question 9

Trustee powers

Answer 9

1. Follow wish of S;
2. powers of unmarried person;
3. co-Ts.

WoSPUP

Question 10

Exclupatory clause

Answer 10

1. Strictly construed but allowed;
2. exceeding powers
3. grossly negligent
4. intentional
   SAPEGI

Question 11

B remedies for T breach of duty

Answer 11

1. Compensatory as if breach did not occur;
2. loyalty breach, favorable or punitive
3. Equitable - return of property, accounting, declaratory, removal if substantial breach.

CABOLFOPEDARRS