Trustee is a legal term that refers to a holder of property on behalf of a beneficiary. SpecialShortpages.-- In Trust law, a beneficiary or cestui que use, aka cestui que trust, is the person or persons who are entitled to the benefit of A trust can be set up either to benefit particular persons, or for any charitable purposes (but not generally for non-charitable purposes): typical examples are a will trust for the testator's children and family, a pension trust (to confer benefits on employees and their families), and a charitable trust. In Common law legal systems a trust is an arrangement whereby Property (including real tangible and intangible is managed by one person (or persons or organizations A charitable trust is a trust established for charitable purposes and is a more specific term than " charitable organisation " A purpose trust is a type of trust which has no beneficiaries, but instead exists for advancing some non- charitable purpose of some kind A testamentary trust (sometimes referred to as a will trust) is a trust which arises upon the death of the Testator, usually under his or her A testator is a person who has written and executed a last will and testament that is in effect at the time of his/her death A pension is a steady income given to a person upon Retirement, typically in the form of a guaranteed annuity. In all cases, the trustee may be a person or company, whether or not they are a prospective beneficiary. Generally a company is a form of Business organization. The precise definition varies
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General duties of trustees
In virtually every common law jurisdiction, trustees have certain duties (some of which are fiduciary). These include the duty to carry out the express terms of the trust instrument, the duty to defend the trust, the duty to prudently invest trust assets, the duty of impartiality among the beneficiaries, the duty to account for their actions and to keep the beneficiaries informed about the trust, the duty of loyalty, the duty not to delegate, the duty not to profit, the duty not to be in a conflict of interest position and the duty to administer the trust in the best interest of the beneficiaries. These duties may be expanded or narrowed by the terms of the instrument creating the trust, but in most instances cannot be eliminated completely.
Benjamin Cardozo once described the standard for fiduciary behavior this way: "Not honesty alone, but the punctilio of an honor the most sensitive, is then the standard of behavior. " Meinhard v. Salmon, 249 N. Y. 458, 164 N. E. 545 (1928).
Necessary traits of trustees
The responsibilities of a trustee can be onerous, although honest trustees are normally indemnified out of the trust assets. 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). fiduciary duty is a legal relationship of confidence or trust between two or more parties most commonly a fiduciary or Trustee and a principal A trust instrument (also sometimes called a deed of trust, where executed by way of Deed) is an instrument in writing executed by a Settlor used to constitute The trustee may find himself liable to claimants, prospective beneficiaries, or third parties. In the event that a trustee incurs a liability (for example, in litigation, 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. In law a lawsuit is a civil action brought before a Court in which the party commencing the action the Plaintiff, seeks a legal or equitable remedy See also Leasing, Renting A lease is a Legal document, but can be an oral arrangement which confers a right on one person (called Thus, at least in theory, a member of a small charity committee could unwittingly risk their family assets.
Trustees are generally held to a "prudent person" standard in regard to meeting their fiduciary responsibilities, though investment, legal, and other professionals can be held to a higher standard commensurate with their higher expertise. 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. A lawyer, according to Black's Law Dictionary, is "a person learned in the law as an attorney, Counsel or Solicitor; a person
In the case of charitable or other trust corporations, the company itself is a trustee and the term "Trustee Board" is frequently used of the board of directors. The company holds the trust property and liabilities separately from the individual trustee-directors, and confers limited liability on them. The members of the board are generally known as trustees, although they remain liable as directors under company law, and as directors are naturally responsible for their acts and omissions in directing the charity. For practical purposes, the members of the board perform the duties of trustees, but the powers of the charity are delegated and exercised subject to the charity's procedural articles or regulations.
Other uses
Many other corporations call their governing boards a board of trustees, though in those cases, they act as a board of directors. To some extent, the fiduciary duties of a director to the company are comparable with those of a trustee. fiduciary duty is a legal relationship of confidence or trust between two or more parties most commonly a fiduciary or Trustee and a principal Generally a company is a form of Business organization. The precise definition varies
In the case of UK charities, a trustee is an unpaid volunteer who undertakes fiduciary responsibilities on behalf of the charity, subject to the provisions of Charity Law, a branch of trust law, and the Charities Act 1993. A charitable trust is a trust established for charitable purposes and is a more specific term than " charitable organisation " For charity trustees, the Charity Commission of England and Wales, Office of the Scottish Charity Regulator of Scotland and Voluntary Activity Unit of Northern Ireland often has concurrent jurisdiction with the Courts. The Charity Commission for England and Wales (Welsh Comisiwn Elusennau Cymru a Lloegr) is the Non-ministerial government department that regulates registered The Office of the Scottish Charity Regulator (OSCR is a Non-ministerial department of the Scottish Government, with responsibility for the regulation of charities Many UK charities are also limited liability companies registered with Companies House, in this case the trustees are also Directors of the company and their liability is limited. A limited company in the United Kingdom is a Corporation whose liability is limited by law Companies House is an Executive Agency of the United Kingdom Government in the Department for Business Enterprise and Regulatory Reform. This is the preferred model if the charity owns property or employs people.
Trustee is also a term used for a prison inmate who has special work-related privileges, usually as a result of good behavior.
Bankruptcy Trustee
In the United States, if a person is adjudged a bankrupt, a trustee will be appointed to hold legal title to the property of the debtor and to perform other duties required by the bankruptcy laws. See United States Trustee for additional information about trustees in US bankruptcy law. The United States Trustee Program is an agency of the United States Department of Justice that is responsible for overseeing the administration of bankruptcy
UK legislation
- Trustee Delegation Act 1999 specifically covers matters to do with land. In the Common law, real property (or realty) refers to one of the two main classes of Property, the other class being Personal property (
- Trustee Act 1925
- Trusts of Land and Appointment of Trustees Act 1996
- Trustee Act 2000
- Charities Act 1993
See also
References
- Fontaine, C. The trustee model of representation is a model of a Representative democracy. The " Trusty system " was a strict system of discipline and security made compulsory under Mississippi state law as the method of controlling and working inmates at JD, LLM, CLU, ChFC (2004) Fundamentals of Estate Planning. Juris Doctor (abbreviated JD or JD, from the Latin, Teacher of Law) is a first professional graduate degree and Professional The Master of Laws is an advanced Academic degree, or research degree and is commonly abbreviated LL The American College Press
Dictionary
trustee
-noun
- A person to whom property is legally committed in trust, to be applied either for the benefit of specified individuals, or for public uses; one who is intrusted with property for the benefit of another; also, a person in whose hands the effects of another are attached in a trustee process.
-verb
- To commit (property) to the care of a trustee; as, to trustee an estate.
- To attach (a debtor's wages, credits, or property in the hands of a third person) in the interest of the creditor.
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