Trustee

From ArticleWorld

There are a number of different definitions for the term trustee. For example, a trustee is a term that is applied in the context of a prison. A trustee is a person in prison who has special work related privileges. These privileges are usually obtained as the result of good behavior and work experience within the penal setting.

On the other hand, the more common definition -- the more widely used definition of the word trustee is the legal term for the person who holds property on behalf of and for the benefit of another person. The person on whose behalf the property is being held is called the beneficiary. Generally speaking, a trustee will hold legal title to the trust property and will also have the ability to sue and be sued on behalf of the trust itself.

In some instances, there will be multiple trustees with authority over a specific trust. In such instances, these trustees will be able to exercise their power and authority by voting and determining what steps they will take. The nature of their relationship, and the mechanisms that they will employ to make decisions, will be set forth in the legal document that created the trust in the first instance.

Responsibilities

There are many different responsibilities associated with being a trustee. Some of the more basic and common of these responsibilities include:

• A trustee has what is called a fiduciary responsibility to the trust, its assets and to the beneficiary. As a result, a trustee has an obligation to deal fairly, honestly and appropriately with the trust, its assets and when acting in the interests of the beneficiary.
• As a general rule, a trustee is held to what is called the standard of a prudent person when he or she is acting in regard to his or her duties as a trustee. This includes making prudent investments, seeking legally advice when prudently necessary and seeking the aid and assistance of other professionals when it is advisable (prudent) to do so. Trustees generally are paid for their time and service to the trust. The payments made to a trustee must be reasonable under the circumstances.

A charitable trust or a trust corporation is a bit different than a more ordinary trust. In the case of a charitable trust or a trust corporation, the entity itself is the trustee and a board frequently oversees the work and functions of the charitable trust or trust corporation. In most instances, the members of the board are referred to or known as trustees. The entity so established will hold title to property. In most countries around the world, there are specific laws governing the establishment, organization and management of charitable trusts, trust corporations or similar legal entities.