What are the legal obligations of a trustee?
The trustee acts as the legal owner of trust assets, and is responsible for handling any of the assets held in trust, tax filings for the trust, and distributing the assets according to the terms of the trust. Both roles involve duties that are legally required.
Are trustees of a charity personally liable?
If charity trustees fail to meet their obligations and they have either acted dishonestly and/or unreasonably, they can be held personally liable and required to compensate their charity for any financial loss caused.
What a trustee Cannot do?
The trustee cannot grant legitimate and reasonable requests from one beneficiary in a timely manner and deny or delay granting legitimate and reasonable requests from another beneficiary simply because the trustee does not particularly care for that beneficiary. Invest trust assets in a conservative manner.
What are the powers and duties of a trustee?
The three primary functions of a trustee are: To make, or prudently delegate, investment decisions regarding the trust assets; To make discretionary distributions of trust assets to or for the benefit of the beneficiaries; and. To fulfill the basic administrative functions of administering the trust.
How many trustees must a charity have?
Aim for a minimum of three unconnected trustees with a good range of skills. Each trustee must read and sign a trustee declaration form to confirm they can act as a trustee.
When can a trustee be held personally liable?
Yes, a trustee can be held personally liable if they are found to be in breach of duty or breach of trust. The state requires trustees to follow the terms of a trust to the letter.
Can you sue a trustee personally?
Normally a trustee is personally liable for obligations incurred in administering the trust. That is, even though the obligations are incurred as trustee, the trustee is still personally liable and can be sued and have its own assets applied to meet any judgment.
What power does a trustee have?
All trustees have the power to manage trust assets. This may include the sale and purchase of trust property and making investments. The trustee must decide whether to use its power to manage assets on a case-by-case basis and must only consider relevant factors when deciding to exercise any power.
Can a trustee do whatever they want?
The trustee cannot do whatever they want. They must follow the trust document, and follow the California Probate Code. … The Trust document specifies when that occurs. The Trustee, however, will not ever receive any of the Trust assets unless the Trustee is also a beneficiary.
On what grounds can a trustee be removed?
Reasons for Trustee Removal.
- Friction Between Co-Trustees.
- Failure to Comply with Trust Terms.
- Non-Cooperation With a Vital Party.
- Neglecting, Mismanaging Trust Assets.
- Abuse of Discretion.
- Misappropriation of Funds.
Can a trustee be prosecuted?
It is not common for a trustee of a trust to be criminally prosecuted, but it does happen. A trustee or anyone else improperly taking money from a trust can be subject to criminal prosecution for theft from the trust, even if they are one of the beneficiaries.
Can a trustee go to jail for stealing from trust?
Yes, a trustee can be jailed for theft if they are convicted of a criminal offense. Under California law, the embezzlement of trust funds or property valued at $950 or less is a misdemeanor offense, which is punishable by up to 6 months in county jail. … In extreme cases, trustees may also face federal criminal charges.
Is a trust responsible for credit card debt?
As Trustee, you are, actually, obligated to pay the debts of the Grantors (the people who created that trust) that you know about before you can distribute assets to the trust’s beneficiaries. That includes taxes and, in this case, credit card debt.