Authored by: Verena Meiser, Esq.—Elville and Associates, 443-393-7696, email@example.com
What does it take for a trustee to serve well? If you feel a bit uncertain how to respond to this question you are not alone, given that (1) the number of trustees grows daily with the number of new trusts and assets held in trust, (2) new trustee-like roles have emerged, such as trust protectors and trust advisors, and (3) emphasis is placed on the growing body of laws governing trustee liability, compensation, administration of trust principal and income, and duties to account and notify beneficiaries, to name just a few.
As a result of the attention given to the legal framework of trusteeship, your first impression may be that trusteeships are purely rule-based. Why is it then, that the three-way relationship between grantor, trustee and beneficiary is often problematic? Trusts are blamed for creating trust babies, since beneficiaries never grow up to learn how to live responsible, purposeful lives. Trustees are deemed overly controlling, raising questions about whose money is held in a trust. Estate planning attorneys are dismayed when they find out that the trustee is not carrying out their client’s (the grantor’s) intent.
Have we, perhaps, forgotten about the importance of fiduciary character? A trustee who has developed fiduciary character knows how to care well for the grantor, the grantor’s wishes, and the beneficiary and actively cares well for all. A trustee who understands the three-way relationship he or she becomes part of, who pays attention, makes thoughtful choices and informed conclusions, will carry out his or her administrative duties well.
Note that at the core of the Uniform Trust Code, a body of statutes codifying the common law of trusts and related case law, lie the trustee’s personal qualities:
“The trustee shall administer the trust as a prudent person would by considering the purposes, terms, distribution requirements and other circumstances of the trust. In satisfying this standard, the trustee shall exercise reasonable care, skill and caution.”
Thus, select a trustee who has had time to develop fiduciary character through observation and learning. Someone with a moral core who is capable of caring well for the grantor, the grantor’s wishes and the beneficiary.
For further reading on the subject of fiduciary character, see “The Moral Core of Trusteeship” by Hartley Goldstone, Rev. Scotty McLennan and Keith Whitaker in the March 2013 issue of the Trusts & Estates journal.