A Trustee is a legal entity, which can be an individual, a bank, or a trust company, that holds the legal title to assets and manages them for the benefit of beneficiaries. In Missouri, trustees have specific duties and obligations, which include:
Fiduciary Duty:
The trustee has a fundamental fiduciary duty to act in the best interest of the beneficiaries, prioritizing their welfare above all else. This duty includes managing the trust assets with loyalty, prudence, and impartiality. The trustee must exercise sound judgment and avoid any actions that could harm the beneficiaries or compromise the trust's integrity.
Duty to Administer the Trust:
The trustee is responsible for administering the trust according to its terms and the governing laws. This includes following the instructions outlined in the trust document, distributing income and principal to beneficiaries as specified, and making investment decisions that align with the trust's objectives and risk tolerance. The trustee must also ensure that the trust's assets are properly titled, safeguarded, and accounted for.
Duty of Impartiality:
The trustee has a duty of impartiality, which means treating all beneficiaries fairly and equitably. The trustee cannot favor one beneficiary over another unless the trust document explicitly authorizes such preferential treatment. This duty requires the trustee to avoid conflicts of interest and make decisions that benefit all beneficiaries equally.
Duty to Account and Inform:
The trustee has a duty to keep accurate and detailed records of all trust transactions, including receipts, disbursements, and investment activities. These records must be made available to beneficiaries upon request. The trustee must also regularly inform beneficiaries about the status of the trust, including its assets, income, expenses, and any changes to the investment portfolio.
Duty of Loyalty:
The trustee has a duty of loyalty to the trust and its beneficiaries, which means acting solely for their benefit and avoiding any conflicts of interest. The trustee cannot engage in self-dealing or use trust assets for personal gain. Any potential conflicts of interest must be promptly disclosed to the beneficiaries, and the trustee must seek their approval before engaging in any transaction that could raise concerns about impartiality.