Trustees Duty to Account — Charles W. Ranson
One of the basic duties of of corporate trustees is to administer and manage trust, which includes keeping accurate and complete record keeping. This is true for individual trustees as well.
I recently gave more insight into these policies.
“Corporate trustees have policies and procedures in place that govern their administration and management of trust. Complete and accurate record keeping is one of the basic duties corporate trustees are required to undertake. This would include their administration file detailing the trustee’s discretionary decisions and the basis thereof. Corporate trustee accountings to beneficiaries on regular intervals in compliance with the Uniform Fiduciary Income and Principal Act that account for the amount of income and principal, the value of trust assets, the change in value from the previous accounting period are common customs and practices for corporate trustee.
“However individual trustees are subject to the same duty to account to beneficiaries. Requiring individual trustees to keep written records of their administration of the trust. Most often individual trustees using bank or brokerage firm for custody services to render financial accountings on regular intervals to beneficiaries. The standard of care to which a trustee is held requires them to maintain accurate and complete records of their administration and management of the trust.
“When a beneficiary brings a claim of breach of fiduciary duty against the trustee and the trustee fails to produce the records of their administration it is common for court of jurisdiction to hold the trustee liable for the claim of breach of fiduciary duty as the trustee has failed to adequately document their administration of the trust. This can often result in a surcharge to the trustee for the breach of the standard of care.”
About Charles W. Ranson: Charles is a wealth management expert witness with decades of experience in financial services. He provides expert witness and litigation consulting services to attorneys who represent clients involved in legal disputes between financial institutions, trustees, beneficiaries, private foundations, family offices and ultrahigh net worth investors.
