Holds legal title. Must act in accordance with fiduciary standards. Trustee’s legal title cannot be reached by trustee’s creditors and is not in trustee’s estate upon death.
Trustee must be able to: Take title, Hold title, and Transfer title to trust property.
Individuals: 18 (or disabilities of minority removed), and Competent. Trustee may be the settlor or a beneficiary (as long as sole trustee is not sole beneficiary).
Corporations Power to act as trustee ▪ Financial institutions (no separate charter needed) ▪ Trust companies (separate charter needed) ▪ Foreign corporations if comply with Probate Code § 105A, Estates Code Chapter 505
Importance No liability until acceptance. Blieden v. Greenspan – p. 76
Methods Signature of trustee = conclusive evidence Exercise power or perform duty = presumption of acceptance, unless ▪ Preservation, if notice given, or ▪ Inspection.
Reasons to accept: Reasons to not accept:
Trustee does not accept: Trust instrument names alternate. Trust instrument provides method of selecting alternate. Court appointment upon petition of interested person.
Presumption = required Not required if: Waived by settlor in trust (unless court nonetheless requires) Corporate trustee
Why require bond? Why waive bond?
Possible benefits: Possible dangers: Note: Majority may act.
Follow procedure settlor provided in the trust. Otherwise, Petition court for permission to resign.
Details later when we cover trust enforcement.
If no trustee remains: Successor named by settlor. Replacement method specified in trust. Court may appoint on its own motion. Court must appoint on petition of interested person.
If at least one trustee remains: Successor named by settlor. Replacement method specified in trust. Court will not fill vacancy. If charitable trust, remaining trustees may fill vacancy by majority vote.
Powers: Presumption = same as original Exceptions: ▪ Trust instrument provides otherwise. ▪ Court order provides otherwise.
Substitute Fiduciary Act