Trustee powers allow a trustee to act as a legal representative and make decisions on behalf of a trust. This process can occur in several contexts, including business, property, tax, and legal matters. It is important to understand what trustees may be authorized to do. A trustee is responsible for managing the trust and protecting its assets.
What Is the Scope of a Trustee’s Powers?
The scope of a trustee’s powers will depend on the trust document and instructions of the settlor or trustee when the trust was created. Generally, a trustee can be given authority to manage and invest any assets in the trust, in accordance with the trust agreement. This can include purchasing and selling investments, managing the trust’s income and expenses, collecting and paying debts, and making distributions to beneficiaries. Trustees are also tasked with ensuring that the trust’s assets are safeguarded, and they may be authorized to hire professionals such as accountants and lawyers when needed. Depending on the terms of the trust, trustees may also be authorized to perform other actions that benefit the trust, such as voting on behalf of the trust.
What Are the Limits of Trustee Powers?
Trustees are obligated to act in good faith and must never use their position for personal gain or in any manner that is contrary to the trust’s best interests. They must also remain impartial between the trust beneficiaries when making decisions on behalf of the trust. In most cases, trustees may not make their own decisions if their powers are limited by the trust document, or if the other beneficiaries of the trust disagree with the decision. If a trustee acts outside of their authorized powers, they may be held liable for breaching their fiduciary duty.
Conclusion
The scope of a trustee’s powers is based on the trust document and instructions of the settlor or trustee. Generally, trustees are authorized to manage and invest assets for the trust, ensure that the trust’s assets are safeguarded, and hire professionals as needed. However, they must always act with good faith, remain impartial between the trust beneficiaries, and never act outside of their authorized powers.