Trustee (or the holding of a trusteeship) is a

legal term {{Short pages monitor Chart of a trust

Trustees have certain duties (some of which are

fiduciary A fiduciary is a person who holds a legal or ethical relationship of trust with one or more other parties (person or group of persons). Typically, a fiduciary prudently takes care of money or other assets for another person. One party, for exampl ...

). These include the duty to: * Carry out the expressed terms of the trust instrument . - Trustees are bound to act in accordance with the terms of the trusts upon which the trustee holds trust property, and commits a breach of trust by departing from the terms of the trust.. 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

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, this is mandated by ''Trustee Act 1925'' (NSW) ). * Be impartial among beneficiaries - the trustee must act impartially between individual beneficiaries 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 and other matters concerning the trust. Trustees do not have priority right to trust documents; it is a personal right and cannot be assigned The right to seek disclosure of trust documents is an aspect of the court's inherent jurisdiction to supervise the administration of trusts. 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. 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 * 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. 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

claimant A plaintiff ( Π in legal shorthand) is the party who initiates a lawsuit (also known as an ''action'') before a court. By doing so, the plaintiff seeks a legal remedy. If this search is successful, the court will issue judgment in favor of the ...

s, prospective beneficiaries, or third parties. If a trustee incurs a liability (for example, in

litigation - A lawsuit is a proceeding by a party or parties against another in the civil court of law. The archaic term "suit in law" is found in only a small number of laws still in effect today. The term "lawsuit" is used in reference to a civil actio ...

, or for taxes, or under the terms of a lease) in excess of the trust property they hold, then 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.-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,

sabbatical officer In the United Kingdom a sabbatical officer is a full-time officer elected by the members of a students' union (or similar body such as students' association, students' representative council or guild of students), commonly at a higher education e ...

s of

students' union A students' union, also known by many other names, is a student organization present in many colleges, universities, and high schools. In higher education, the students' union is often accorded its own building on the campus, dedicated to social, ...

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

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

depositor A deposit account is a bank account maintained by a financial institution in which a customer can deposit and withdraw money. Deposit accounts can be savings accounts, current accounts or any of several other types of accounts explained below. ...

s, directors of a

corporation A corporation is an organization—usually a group of people or a company—authorized by the state to act as a single entity (a legal entity recognized by private and public law "born out of statute"; a legal person in legal context) and r ...

are trustees for the

stockholder A shareholder (in the United States often referred to as stockholder) of a corporation is an individual or legal entity (such as another corporation, a body politic, a trust or partnership) that is registered by the corporation as the legal owner ...

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

board of directors A board of directors (commonly referred simply as the board) is an executive committee that jointly supervises the activities of an organization, which can be either a for-profit or a nonprofit organization such as a business, nonprofit organiz ...

Charities in the United Kingdom

In the case of UK

charities A charitable organization or charity is an organization whose primary objectives are philanthropy and social well-being (e.g. educational, religious or other activities serving the public interest or common good). The legal definition of a cha ...

, 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

Charities Act 1993 The Charities Act 2011c 25 is a UK Act of Parliament. It consolidated the bulk of the Charities Act 2006, outstanding provisions of the Charities Act 1993, and various other enactments. Repeals Legislation repealed in its entirety by the 2011 A ...

. For charity trustees, the

Charity Commission , type = Non-ministerial government department , seal = , seal_caption = , logo = Charity Commission for England and Wales logo.svg , logo_caption = , formed = , preceding1 = , ...

of England and Wales,

Office of the Scottish Charity Regulator The Scottish Charity Regulator (OSCR) is a non-ministerial department of the Scottish Government with responsibility for the regulation of charities in Scotland. OSCR is the independent regulator and registrar for more than 24,000 Scottish ch ...

of Scotland and

Voluntary Activity Unit Voluntary may refer to: * Voluntary (music) * Voluntary or volunteer, person participating via volunteering/volunteerism * Voluntary muscle contraction See also * Voluntary action * Voluntariness, in law and philosophy * Voluntaryism Volunt ...

of Northern Ireland often has concurrent jurisdiction with the courts. Many UK charities are also

limited liability companies A limited liability company (LLC for short) is the US-specific form of a private limited company. It is a business structure that can combine the pass-through taxation of a partnership or sole proprietorship with the limited liability of a ...

registered with

Companies House Companies House is the executive agency of the company registrars of the United Kingdom, falling under the remit of the Department for Business, Energy and Industrial Strategy. All forms of companies (as permitted by the Companies Act) are i ...

, 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. One of the key changes made was that it introduced the

Charitable Incorporated Organisation A Charitable Incorporated Organisation (CIO) is a corporate form of business designed for (and only available to) charitable organisations in England and Wales, similar to (but with important differences from) a Scottish Charitable Incorporat ...

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. 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.

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

legislative body A legislature is an assembly with the authority to make laws for a political entity such as a country or city. They are often contrasted with the executive and judicial powers of government. Laws enacted by legislatures are usually known as p ...

as outlined by local or state law. It can be composed of the

mayor In many countries, a mayor is the highest-ranking official in a municipal government such as that of a city or a town. Worldwide, there is a wide variance in local laws and customs regarding the powers and responsibilities of a mayor as well a ...

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

city council A municipal council is the legislative body of a municipality or local government area. Depending on the location and classification of the municipality it may be known as a city council, town council, town board, community council, rural counc ...

town council A town council, city council or municipal council is a form of local government for small municipalities. Usage of the term varies under different jurisdictions. Republic of Ireland Town Councils in the Republic of Ireland were the second ti ...

. Small villages have a trustee instead of a mayor, who is elected to manage village business in a similar function. In some states, a

civil township A civil township is a widely used unit of local government in the United States that is subordinate to a county, most often in the northern and midwestern parts of the country. The term town is used in New England, New York, and Wisconsin to ref ...

may be administered by a trustee or a group of trustees; see Indiana Township Trustee for an example.

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 " bankruptcy estate". (See 11 U.S.C. § 541.) For all bankruptcies (consumer or business) filed under

Chapter 7 Chapter 7 may refer to: Albums * ''Chapter Seven'' (album), a 2013 album by Damien Leith. *''Chapter VII'', a 1973 album by drummer Buddy Miles George Allen "Buddy" Miles Jr. (September 5, 1947February 26, 2008) was an American composer, drum ...

, 12 or 13 of

Title 11 of the United States Code Title 11 of the United States Code, also known as the United States Bankruptcy Code, is the source of bankruptcy law in the United States Code. Chapters Title 11 is subdivided into nine chapters. It used to include more chapters, but some of them ...

(the Bankruptcy Code), a trustee (the "

trustee in bankruptcy A trustee in bankruptcy is an entity, often an individual, in charge of administering a bankruptcy estate. Canada In Canada, a licensed insolvency trustee (LIT) is an individual or a corporation licensed by the official superintendent to hold ...

" or TIB) is appointed by the

United States Trustee The United States Trustee Program is a component of the United States Department of Justice that is responsible for overseeing the administration of bankruptcy cases and private trustees. The applicable federal law is found at and , et seq. In ...

, 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

Chapter 11 Chapter 11 of the United States Bankruptcy Code (Title 11 of the United States Code) permits reorganization under the bankruptcy laws of the United States. Such reorganization, known as Chapter 11 bankruptcy, is available to every business, wheth ...

, the

debtor A debtor or debitor is a legal entity (legal person) that owes a debt to another entity. The entity may be an individual, a firm, a government, a company or other legal person. The counterparty is called a creditor. When the counterpart of this ...

continues to manage the property of the bankruptcy estate, as "

debtor in possession A debtor in possession or DIP in United States bankruptcy law is a person or corporation who has filed a bankruptcy petition, but remains in possession of property upon which a creditor has a lien or similar security interest. A debtor becomes the ...

," 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

Trustee Delegation Act 1999
' specifically covers matters to do with

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. :

Trustee Act 1925 The Trustee Act 1925c 19 is an Act of Parliament of the United Kingdom passed on 9 April 1925, which codified and updated the regulation of trustees' powers and appointment. It accompanied the land reform legislation of the 1920s. It came into eff ...

Trusts of Land and Appointment of Trustees Act 1996 The Trusts of Land and Appointment of Trustees Act 1996c 47, usually called "TLATA" or "TOLATA", is an Act of Parliament of the United Kingdom, which altered the law in relation to trusts of land in England, Wales, Scotland and Northern Ireland. B ...

Trustee Act 2000 The Trustee Act 2000c 29 is an Act of the Parliament of the United Kingdom that regulates the duties of trustees in English trust law. Reform in these areas had been advised as early as 1982, and finally came about through the Trustee Bill 2000 ...

:
Charities Act 1993
'

United Nations

References

Further sources

*Fontaine, C. JD,

LLM A Master of Laws (M.L. or LL.M.; Latin: ' or ') is an advanced postgraduate academic degree, pursued by those either holding an undergraduate academic law degree, a professional law degree, or an undergraduate degree in a related subject. In mos ...

, CLU, ChFC (2004) ''Fundamentals of Estate Planning''. The American College Press
Trustee Act 2000 Summary
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