The different types of trustee duties include administration of the trust, loyalty, impartiality, use of special skills, protection of trust property, and reporting. Each jurisdiction will establish and define the different types of trustee duties in its statutes, usually under a section called the Uniform Trust Code. A trustee is responsible for managing the property or assets placed in a trust. The purpose of the trust is to provide benefits to a person or people, or to have a charitable purpose. The people or entities benefiting from the trust are beneficiaries.
Trustee duties require that management of the trust occur in accordance with the trust instrument. The trust instrument is a document that tells the trustee what he or she must do to administer the trust. In executing this obligation, the trustee must act in good faith. This means the trustee must be honest in executing his or her duties and not do anything to take advantage of or defraud the beneficiaries of the trust. A trustee must also administer the trust instrument in compliance with the law.
Administering the trust requires a trustee to gather the property and assets of the trust, which the law refers to as the "res." Protection and investment of the res are trustee duties. A trustee must also pay any applicable taxes from the assets of the trust. The law requires that a trustee execute all trustee duties in a prudent manner. In performance of the trustee duties, a person serving as a trustee may need to obtain professional advice to make investments. If a trustee has special knowledge or skills, the law imposes the duty to exercise such skills for the benefit of the trust.
A duty of impartiality is one of the many trustee duties. If a trust has multiple beneficiaries, this duty requires that the trustee treat all beneficiaries impartially. This means a trustee cannot do anything to favor one beneficiary over the interests of other beneficiaries, although a trust instrument may require different treatment of beneficiaries in terms of distributions of the trust. A trustee must still invest and manage the property and assets of the trust with impartiality.
Trustee duties include an obligation to keep beneficiaries informed. Beneficiaries are entitled to obtain a copy of the trust instrument and information concerning the administration of the trust. A trustee ordinarily will provide an annual report to the beneficiaries. A trustee must also provide information to beneficiaries upon their request. Further, a trustee must always ensure that beneficiaries have his or her contact information to allow beneficiaries to make contact without difficulty.