Personal Representative Duties

By Patricia Louise Nelson of Two Spruce Law

In addition to many other duties, trustees have the duty to use any special skills or expertise for the benefit of the trust. When a trustee who has special skills or expertise, or is named trustee in reliance upon the trustee’s representation that the trustee has special skills or expertise, that trustee must use those special skills in administering the trust. For example, a CPA is serving as the trustee could be expected to know about and use all tactics available to the minimize the trust’s tax liability.

Also, trustees are allowed to delegate duties and powers that a “prudent trustee of comparable skills” could properly delegate under the circumstances. Of course, that leaves a couple of big questions. Like what is a prudent trustee of comparable skills? And under what circumstances could such a person delegate?  This rule is applied on a case-by-case basis. So, if the trustee wants to take a weekend and go drinking on a fishing boat, she may be allowed to delegate her duties for that weekend but probably not to one of her drinking buddies.  

In making delegation decisions, the trustee must exercise reasonable care, skill, and caution in: selecting the person to whom they are delegating; establishing the scope and terms of delegation, consistent with the terms of the trust; and review the agent’s actions from time to time in order to make sure they are doing a good job with the scope of the delegation.

Note that the person to whom the trustee delegates duties owes a duty to the trust to exercise reasonable care to comply with the terms of the delegation.

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By Patricia Louise Nelson of Two Spruce Law

In addition to many other duties, trustees have the duty to use any special skills or expertise for the benefit of the trust. When a trustee who has special skills or expertise, or is named trustee in reliance upon the trustee’s representation that the trustee has special skills or expertise, that trustee must use those special skills in administering the trust. For example, a CPA is serving as the trustee could be expected to know about and use all tactics available to the minimize the trust’s tax liability.

Also, trustees are allowed to delegate duties and powers that a “prudent trustee of comparable skills” could properly delegate under the circumstances. Of course, that leaves a couple of big questions. Like what is a prudent trustee of comparable skills? And under what circumstances could such a person delegate?  This rule is applied on a case-by-case basis. So, if the trustee wants to take a weekend and go drinking on a fishing boat, she may be allowed to delegate her duties for that weekend but probably not to one of her drinking buddies.  

In making delegation decisions, the trustee must exercise reasonable care, skill, and caution in: selecting the person to whom they are delegating; establishing the scope and terms of delegation, consistent with the terms of the trust; and review the agent’s actions from time to time in order to make sure they are doing a good job with the scope of the delegation.

Note that the person to whom the trustee delegates duties owes a duty to the trust to exercise reasonable care to comply with the terms of the delegation.

We are here to help. Give us a call for a free consultation!