Tuesday, June 11, 2013

What Does The Trust Say?

It should seem to be obvious, but I often receive telephone calls from someone who is the trustee of the trust asking me if something is permissible.

The starting point is to look at the trust instrument, often referred to as the Trust Declaration or Trust Agreement.  The powers of the trustee should be set forth in the document in a section often referred to as the "powers sections".  

Trustees must "accept" the trust upon undertaking the administration of the trust, and this includes carrying out the trust as it set out in the trust document.

Trustees cannot just ignore the trust terms and do what they want to.  It is true that a court is not supervising the trust, but a trustee remains liable to the beneficiaries of the trust.

Dwight Edward Tompkins,
California Trust Administration Attorney.
Orange County, California.