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| The person who performs an exchange of title between 2 people, often referred to as a Trust, except in trusts created during the lifetimes of their creators, in which the Trustee holds the legal Title of the property as an intangible asset, while the Trustor is no longer responsible for any property, and beneficiary isn't liable for the property owned by the Trust on legal standpoint, and in which all 3 are recreated by the same individual outside of a court of law. | |||
| {{For|other uses of "trustee", "trusty", and related terms|Trustee (disambiguation)}} | |||
| {{Redirect|Trusteeship}} | |||
| {{Wills, trusts, estates}}'''Trustee''' (or the holding of a '''trusteeship''') is a ] which, in its broadest sense, is a synonym for anyone in a ] and so can refer to any person who holds property, authority, or a position of trust or responsibility to transfer the title of ownership to the person named as the new owner, in a trust instrument, called a beneficiary. A trustee can also refer to a person who is allowed to do certain tasks but not able to gain income, although that is untrue.<ref name="Black's Law 5th">''Black's Law Dictionary, Fifth Edition'' (1979), p. 1357, {{ISBN|0-8299-2041-2}}.</ref> Although in the strictest sense of the term a trustee is the holder of property on behalf of a ],<ref name="Black's Law 5th"/> the more expansive sense encompasses persons who serve, for example, on the ] of an institution that operates for a charity, for the benefit of the general public, or a person in the local government. | |||
| A ] can be set up either to benefit particular persons, or for any ] (but not generally for non-charitable purposes): typical examples are a ] for the ]'s children and family, a ] trust (to confer benefits on employees and their families) and a charitable trust. In all cases, the trustee may be a person or ], whether or not they are a prospective beneficiary, although a property held in Trust as an asset by a trustee is always for a beneficiary. | |||
| ==General duties of trustees==<!-- This section is linked from ]. See ] --> | |||
| ] | |||
| Trustees<ref>{{cite web|url=http://cyber.law.harvard.edu/trusting/unit5all.html|title=The New Palgrave Dictionary of Economics and the Law, Definition of "fiduciary duties" by Tamar Frankel Vol.2, p.127-128 |publisher=Harvard Edu|access-date=2011-09-08}}</ref> have certain duties (some of which are ]). These include the duty to: | |||
| * Carry out the expressed terms of the trust instrument <ref name="Youyang">{{cite AustLII|HCA|15|2003|litigants=] |parallelcite=(2003) 212 ] 484 |date=3 April 2003 |courtname=auto}}.</ref> - A trustee is bound to act in accordance with the terms of the trusts upon which he or she holds trust property, and commits a breach of trust if he or she departs from the terms of the trust.<ref name="Breen v Williams">{{cite AustLII|HCA|57|1996|litigants=] ("Medical Records Access case") |parallelcite=(1996) 186 ] 71|date=6 September 1996 |courtname=auto}}.</ref> However, a trustee may act otherwise than in accordance with the terms of the trust if all beneficiaries, being ''sui juris'' and together absolutely entitled, direct the trustee to do so (or so consent). If any question arises as to the constriction of the provisions of the trust, the trustee must approach the court for determination of the question. | |||
| * Defend the trust | |||
| * Prudently invest trust assets (in ], this is mandated by ''Trustee Act 1925'' (NSW) <ref>{{cite Legislation AU|NSW|act|ta1925122|Trustee Act 1925}} ss14, 14A & 14C.</ref>) | |||
| * Be impartial among beneficiaries - the trustee must act impartially between individual beneficiaries<ref>{{cite AustLII|VicLawRp|70|1948|litigants=Tanti v Carlson |parallelcite= ] 401 |date=2 April 1948 |courtname=] (Vic)}}.</ref> as well as between different classes of beneficiaries. | |||
| * Account for actions and keep beneficiaries informed, these include a duty to inform beneficiaries as to their entitlements under the trust<ref>Hawkesley v May </ref> and other matters concerning the trust. Trustees do not have priority right to trust documents; it is a personal right and cannot be assigned<ref>Global Custodians v Mesh </ref> The right to seek disclosure of trust documents is an aspect of the court's inherent jurisdiction to supervise the administration of trusts.<ref>Schmidt v Rosewood Trust </ref> As trustees as not under a duty to disclose their reasoning in applying a trust power (unless the trust instrument requires otherwise), there is no duty to disclose any documents dealing with the decision making promise.<ref>Tierney v King </ref> Protection of confidentiality has been described as 'one of the most important limitations on the right to disclose of trust documents'. 'Memoranda or letter of wishes' do not necessarily need to be disclosed to a beneficiary if they are of a number of potential beneficiaries. | |||
| * Be loyal | |||
| * Not delegate | |||
| * Not profit; however, may charge fees for services to the Trust <ref>Case law authority ''Keech v Sanford'' EWHC Ch J76 </ref> | |||
| * Not be in a conflict of interest position | |||
| * Administer in the best interest of the beneficiaries | |||
| The modern interpretation of fiduciary duty requires the consideration of environmental, social, and governance (ESG) factors as these are long-term investment value drivers.<ref>PRI, UNEP FI, & The Generation Foundation. . 2018</ref> When evaluating whether or not an institutional investor has delivered on its fiduciary duties, both the outcomes achieved and the process followed are of critical importance. | |||
| The terms of instrument that creates the trust may narrow or expand these duties—but in most instances they cannot be eliminated completely. Corporate trustees, typically trust departments at large banks, often have very narrow duties, limited to those the trust indenture explicitly defines. | |||
| A trustee carries the fiduciary responsibility and liability to use the trust assets according to the provisions of the trust instrument (and often regardless of their own or the beneficiaries' wishes). The trustee may find himself liable to ]s, prospective beneficiaries, or third parties. In the event that a trustee incurs a liability (for example, in ], or for taxes, or under the terms of a lease) in excess of the trust property they hold, they may find themselves personally liable for the excess. | |||
| Trustees are generally held to a "prudent person" standard in regard to meeting their fiduciary responsibilities, though investment, legal, and other professionals can, in some jurisdictions, be held to a higher standard commensurate with their higher expertise.<ref>see: “ Speight v Gaunt EWCA Civ 1 </ref>-Trustees can be paid for their time and trouble in performing their duties only if the trust specifically provides for payment. It is common for lawyers to draft will trusts so as to permit such payment, and to take office accordingly: this may be an unnecessary expense for small estates. | |||
| In an exception to the duties outlined above, ]s of ]s who are also trustees of these organisations they work for do have the right to a salary (and hence profit from their being a trustee). This is an exception explicitly granted in the 1993 act<ref>{{cite web|url=http://www.charity-commission.gov.uk/Publications/cc3.aspx#f2 |title=CC3 - The Essential Trustee: What you need to know |publisher=Charity-commission.gov.uk |date=2008-04-01 |access-date=2012-03-05}}</ref> | |||
| ==Other uses== | |||
| The broadest sense of the term ''trustee'' applies to someone held to a fiduciary duty similar in some respects to that of a trustee proper. For example, the directors of a bank may be trustees for the ]s, directors of a ] are trustees for the ]s and a guardian is trustee of his ward's property. Many corporations call their governing board a board of trustees, though in those cases they act as a ]. | |||
| ===Charities in the United Kingdom=== | |||
| In the case of UK ], a ''trustee'' is a volunteer who undertakes fiduciary responsibilities on behalf of the charity, subject to the provisions of Charity Law, a branch of trust law, and the ].<ref>{{UK-LEG|title=Charities Act 1993|path=ukpga/1992/38}}</ref> For charity trustees, the ] of England and Wales, ] of Scotland and ] of Northern Ireland often has concurrent jurisdiction with the courts. Many UK charities are also ] registered with ], in this case the trustees are also directors of the company and their liability is limited. This is the preferred model if the charity owns property or employs people. | |||
| The law on this in England changed considerably with the Charities Act of 2006. An account of the main changes can be found in "Charities Act 2006 A guide to the new law" by Michael King and Ann Phillips{{Who|date=August 2015}}. One of the key changes made was that it introduced the ] which is basically a limited liability charity. There are thus now two main aspects of corporate management of charities. | |||
| One is the traditional way in which a corporation is a corporate trustee of a given charity. The second is the new way, in which the charity itself is incorporated as a CIO{{clarify|date=June 2019}}. The advantages and disadvantages of the different methods is a complicated matter. According to King and Philips, many of the advantages of incorporating as a CIO are obtained if the trustees are not individuals but a corporate entity. {{Citation needed|date = August 2015}} | |||
| ===Local government in the United States=== | |||
| Depending on the state, a trustee is a member of the ''village board of trustees'', which is a village's elected ] as outlined by local or state law. It can be composed of the ] and a set number of trustees and usually manages village property, finances, safety, health, comfort, and general welfare and leadership of the town (acting as a board of police or fire commissioners or a moderate income housing board for example). ''Village board of trustees'' is comparable to but distinguished from ] or ]. Small villages have a trustee instead of a mayor, who is elected to manage village business in a similar function. | |||
| In some states, a ] may be administered by a trustee or a group of trustees; see ] for an example. | |||
| ==={{anchor|Correctional institution usage}}Correctional institution usage=== | |||
| {{See also|Trusty system (prison)}} | |||
| In this context, a "trusty" is a prisoner who is trusted not to attempt an escape, and therefore requires little or no guarding. For example, a trusty may be allowed to leave the prison to attend work or other important events. Occasionally, "trusty" is confused with "trustee".<ref>{{cite web|author=Nelson, Pam|title=Word usage: trustee and trusty|work=Grammar Guide|publisher=American Copy Editors Society|url=http://grammarguide.copydesk.org/2008/06/28/word-usage-trustee-and-trusty/|date=June 28, 2008|access-date=June 19, 2019}}</ref> | |||
| ==Bankruptcy trustee== | |||
| In the United States, when a consumer or business files for bankruptcy all property belonging to the filer becomes property of a newly created entity, the "]". (See 11 U.S.C. § 541.) For all bankruptcies (consumer or business) filed under ], ] or ] of ] (the Bankruptcy Code), a trustee (the "]" or TIB) is appointed by the ], an officer of the Department of Justice that is charged with ensuring the integrity of the bankruptcy system and with representatives in each court, to manage the property of the bankruptcy estate, including bringing actions to avoid pre-bankruptcy transfers of property. In bankruptcies filed under ], the ] continues to manage the property of the bankruptcy estate, as "]," subject to replacement for cause with a trustee. | |||
| Chapter 7 trustees in bankruptcy are chosen by the United States Trustee from a panel, and are known as panel trustees. Every judicial district has a permanent Chapter 13 trustee, known as a "standing trustee." As cases under Chapter 12 (for family farmers or fishermen) are filed fairly infrequently, the United States Trustee usually makes trustee appointments in such cases on an ad hoc basis. | |||
| ==UK legislation== | |||
| :'' specifically covers matters to do with ]. | |||
| :] | |||
| :] | |||
| :] | |||
| :'''' | |||
| ==United Nations== | |||
| {{Further |United Nations Trusteeship Council}} | |||
| ==See also== | |||
| {{Wiktionarypar|trustee}} | |||
| * ] | |||
| * ] | |||
| ==References== | |||
| {{Reflist}} | |||
| ==Further sources== | |||
| *Fontaine, C. ], ], ], ] (2004) ''Fundamentals of Estate Planning''. The American College Press | |||
| * | |||
| {{Authority control}} | |||
| ] | |||
| ] | |||
| ] | |||
| ] | |||
| ] | |||
Revision as of 18:53, 18 March 2021
The person who performs an exchange of title between 2 people, often referred to as a Trust, except in trusts created during the lifetimes of their creators, in which the Trustee holds the legal Title of the property as an intangible asset, while the Trustor is no longer responsible for any property, and beneficiary isn't liable for the property owned by the Trust on legal standpoint, and in which all 3 are recreated by the same individual outside of a court of law.