A trustee is a person who oversees and manages a trust. This role is most commonly filled, initially at least, by the person selected by the settlor of the trust. More simply put, the person who devises the trust (settlor) picks the first administrator (trustee). The trustee's "job" is to administer the trust in accordance with its terms. When there are beneficiaries of the trust who are alive and are other than the creator of the trust, the trustee can become the target for, among other things, claims of mismanagement of funds or wrongfully withholding assets
The trustee must then be aware of exactly what standard they will be held to in making decisions on behalf of the trust.
(") A trustee has the duty to exercise reasonable care, skill, and caution in investing and managing trust assets as a prudent investor would, by considering the purposes, terms, distribution requirements, and other circumstances of the trust.” Norwest Bank Minnesota North, N.A. v. Beckler, 663 N.W.2d 571, 580 (Minn. Ct. App. 2003) (quotation originally omitted). “A trustee may not exercise its discretion in a manner that defeats the settlor’s intent or the purposes of the trust.” Id. Additionally, the trustee is required to act in "good faith", with "proper motives" and "within the bounds of reasonable judgment". Id. at 580-581.
While the above captures the mindset required of the trustee, the trustee is also best served to document why he did what he did. If a trustee has any uncertainty about a course of action, getting the opinion of an industry professional (i.e. a real estate agent or general contractor) is a good step to insulate the trustee from liability.
A trustee's role is critical, difficult, and creates a target. You do not want personal liability for trying to do the right thing, so consult with me if you have any hesitations on what to do or how to do it.
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