Duties of Trustees

• Author: Eileen E. Gillese, Martha Milczynski
• Pages: 142-156

CHAP TER 9

DUTIES OF TRUSTEES

A. INT RODUCTION

Trusteeship is an extremely onerous position. Trustees are subject to the

specif‌ic duties created by t he trust instrument and by leg islation. In addi-

tion, they have a great many duties placed upon them by equity. These

duties have been car ved out through a long serie s of cases decided by the

courts of equity and according to equ itable principles; although it seems

like a cont radiction in ter ms, when we descr ibe such duties we will refer

to them as common law duties. The words “common law” are used not

as a reference to the King’s common law courts, but in contradistinction

to duties imposed by legislation or by instrument.

An understandi ng of the common law duties imposed upon t rustees

has as its starting point the fact t hat a trustee i s a f‌iduciary.1 The trustee

exists to adm inister the property on behalf of the benef‌ic iary. The trustee

is to put the benef‌iciar y’s interests f‌irst in the performance of any act

and the exercise of any powers or duties. Thi s obligation to act solely

for the benef‌it of the benef‌iciary is ter med the “duty of loyalty.” It is the

duty of loyalty that underlies all the duties discus sed in this chapter: the

obligation to perform personally, the duty to invest the trust assets, the

obligation to act impartia lly, the duty to account, and the duty to prov ide

information. The duty of loyalty also requires trustees to act honestly,

1 See chapter 1 for a more deta iled discussion of the f‌iduc iary concept.

142