Trustees are not usually subject to court supervision (unlike executors in court supervised probates). Trustees, and Special Trustees and Trust Protectors are the persons entrusted with the proper implementation of a Trust in a managerial or oversight capacity.
Trustees have a legal obligation to adhere to the terms of the trust and be accountable to its beneficiaries for their actions. This obligation, also called their fiduciary duty, is one of the most important legal tools at your disposal to hold them responsible.
A trustee is responsible for oversight and management of a trust to ensure that the trust agreement is followed. A trust can be established by someone while they are alive for the benefit of another, in which case they must name the trustee and fund the trust.
Trustees have a fiduciary responsibility to the trust's beneficiary or beneficiaries. This means a trustee must act in the best interests of the beneficiaries to manage their assets.
A trustee must abide by the trust document and the California Probate Code. They are prohibited from using trust assets for personal gain and must act in the best interest of the beneficiaries. Trust assets are meant for the benefit of the trust beneficiaries and not for the personal use of the trustee.
There are many reasons someone would choose to set up a trust. These include: To separate the owner of the asset (the beneficiary) and control over that asset (the trustee), for example.
An executor does not possess the power to overrule or change the terms established by a trust; these roles carry separate responsibilities. An executor's role consists of overseeing and closing an estate as per its will's instructions without disrupting or interfering with their independent functions as trustee.
Controlling Persons of a trust, means the settlor(s), the trustee(s), the protector(s) (if any), the beneficiary(ies) or class(es) of beneficiaries, and any other natural person(s) exercising ultimate effective control over the trust (including through a chain of control or ownership).
Generally speaking, once a trust becomes irrevocable, the trustee is entirely in control of the trust assets and the donor has no further rights to the assets and may not be a beneficiary or serve as a trustee.
Under California law, beneficiaries can sue a trustee. The initial step is confirming the trustee's identity. Subsequently, one must prove a breach of duty.
Breach of Fiduciary Duty
When trustees fail to follow the trust, they breach their fiduciary duty. This breach can have serious legal consequences.
Trustees generally do not have the power to change the beneficiary of a trust. The right to add and remove beneficiaries is a power reserved for the settlor of the trust; when the grantor dies, their trust will usually become irrevocable. In other words, their trust will not be able to be modified in any way.
WHO IS THE “RIGHT” TRUSTEE? A natural first inclination is to consider a family member or trusted friend who knows you and your philosophies and values well. Family or friends may personally know your beneficiaries and their needs.
If a trustee loses mental capacity, there may be express powers in the trust deed about the procedure for their removal or replacement. If there is no such power, the surviving trustees may be able to replace them under section 36(1) because they are incapable of acting.
Under the duty of loyalty, a Trustee must administer a Trust “solely in the interest of the beneficiaries.” (See Probate Code section 16002.)
In addition to following all directions in the trust document, the trustee is responsible for: Assuming legal responsibility for administration of the trust. Taking control of and protecting trust assets. Handling accounting responsibilities of the trust.
A trustee in a trust is responsible for managing, protecting, and distributing the assets of the trust according to the terms set out by the trust's creator (the grantor). This can include investing assets, paying bills, filing tax returns, and making distributions to beneficiaries.
The one establishing a trust is called the trustor or grantor. The one who oversees and manages the trust is called the trustee. In a revocable trust, the trustor may control the trust as well, but in an irrevocable trust, the trustee must be somebody else.
The answer to who holds more power depends largely on the context and specific circumstances of the estate or trust. Here's a summary to help clarify: Duration of Authority: Trustees often have ongoing responsibilities and powers that can extend indefinitely, while executors have a more limited, temporary role.
Executors are bound to the terms of the will, which means they are not permitted to change beneficiaries. The beneficiaries who were named by the decedent will remain beneficiaries so long as the portions of the will in which they appear are not invalidated through a successful will contest.
Typically, a revocable trust with clear provisions for outright distribution might conclude within 12 to 18 months. However, in simpler cases, the process can take an average of 4 to 5 months without complications.
So, now you know that the Trust Maker holds the most power before the Trust is established, but the Trustee holds the most power after the Trust is established. And you also know that in many cases, during your lifetime you have both roles. So who has the most power in a trust? If you are creating it, YOU do.
Ultimately, trustees can only withdraw money from a trust account for specific expenses within certain limitations. Their duties require them to comply with the grantor's wishes. If they breach their fiduciary duties, they will be removed as the trustee and face a surcharge for compensatory damages.
A trustee typically has the most control in running their trust. They are granted authority by their grantor to oversee and distribute assets according to terms set out in their trust document, while beneficiaries merely reap its benefits without overseeing its operations themselves.