Fiduciary Duty: What Trustees MUST Know

Taking on the role of trustee means stepping into a position of significant responsibility that comes with legal obligations many people don't fully understand. This enlightening discussion between attorneys Haley Matson and Jordan McIntyre breaks down the critical aspects of being a trustee and managing someone else's assets as a fiduciary.

The attorneys clearly explain that accepting a trustee position means you're legally bound to a set of duties including loyalty, impartiality, and prudent administration. They highlight the specific legal frameworks governing these responsibilities, pointing to Chapters 32C and 36 of North Carolina law where these duties are formally outlined. For anyone serving as a trustee, understanding these legal requirements isn't optional—it's essential to protect both the beneficiaries and yourself.

The conversation takes a practical turn when the attorneys identify the most common pitfalls they've observed in their practice. They emphasize the dangers of mixing personal and fiduciary funds, particularly when close family relationships are involved. Using trust assets for personal benefit, ignoring the explicit terms of trust documents, and failing to keep detailed records can all lead to serious legal consequences. Their advice is straightforward: document everything, communicate openly with beneficiaries, and seek professional guidance when needed. McIntyre Elder Law offers comprehensive support for trustees, from explaining document terms to handling accountings or even taking over administration duties when the responsibility becomes overwhelming. Whether you're a new trustee just learning your duties or an experienced one facing challenges, their team is available for consultation at offices in Shelby, Charlotte, and Hendersonville.

Ready to understand your trustee responsibilities better? Schedule a free consultation by calling 1-888-999-6600 or visiting the firm's website to explore their educational resources on fiduciary duties and trust management.

Episode Transcript

Haley Matson (00:09):
Good morning everyone.
I'm attorney Haley Matson withMcIntyre Elder Law, here with
attorney Jordan McIntyre, andtoday, on this Elder Law report,
we're going to be talking aboutwhat trustees need to know, so
being a trustee is a veryimportant position.
If you do choose to accept it,it's going to be what they call

(00:31):
a fiduciary role, so you will bemanaging someone else's assets
and their money.
As a trustee, you have a coupledifferent duties that you need
to follow, including, like theduty of loyalty, impartiality.
You need to administrate itprudently and if there's any
investments that need to be done, those also need to be prudent

(00:52):
investments, if there's anyinvestments that need to be done
.

Jordan McIntyre (00:55):
Those also need to be prudent investments.
Yes, and if you want tospecifically know where all
these duties are contained rightfor powers of attorneys, it's
within Chapter 32C.
With any type of trust,planning and trust, it's going
to be in Chapter 36.
But as an agent or a trustee,you are on a fiduciary duty and
you want to be aware of whatyour obligations are.

(01:17):
This will be outlined withinyour specific document.
But also, just very simply, youneed to make sure you document
your transactions.
Hopefully you've hadconversations with either the
grantor, the trust grantor orthe principal of that power of
attorney, so you know what theywanted.
Right.
You know what your obligationsare and as a trustee, you don't

(01:39):
want to do something improperlyand be sued by the beneficiaries
, so you can meet with anattorney if you have questions
about what your obligations are.
Right.
If you don't even know what afiduciary is, definitely come
into the office and ask us aboutwhat you need to be doing, how
to be careful and just make sureyou don't do something
improperly that can expose youto civil liability.

(02:00):
And Haley can give you some ofthose best practices and what to
do.

Haley Matson (02:05):
Yeah, sure.
So some of the biggest pitfallsthat we see with fiduciaries
and trustees is going to bemixing personal and fiduciary
funds.
We've seen that happen in acouple different areas, most
frequently with powers ofattorney.
It can be really hard whenyou're in a close relationship
with that person Say, you'relike a child and you're the

(02:28):
agent of a parent.
You just want to make sure thatany sort of transactions, any
money that you have and thatthey have, is completely
separated.
Similarly, you just want tomake sure that any sort of
transactions, any money that youhave and that they have, is
completely separated.
Similarly, you also don't wantto use their money for your
benefit.
If they find out that you'vebeen using their money to order
DoorDash, you could incur somecivil liability there.

(02:48):
I mean, that's not somethingyou're supposed to do.
You also can't ignore the termsof the documents here.
So if you're a trustee and thetrust instructions may say
something that maybe you don'ttotally agree with, unless it
says that you can only do itlike within your discretion as
trustee, you do have a duty tofollow those instructions.

(03:09):
And finally, it's always goodto keep records and speak with
the family, speak with thebeneficiaries so that you know
what they want and so that youknow how the family is going to
react to those things thatyou're going to do.

Jordan McIntyre (03:24):
Yeah, and if you're having difficulty with
administering a trust, come intothe office.
We can assist you.
Read the trust document,explain exactly what you're
supposed to be doing Technically.
You do have that duty toaccount and you want to be
careful with that because abeneficiary can request that
accounting from you and you'rerequired to present that.

(03:45):
So if you need help with anaccounting or just you want the
office to become the trustadministrator because you're
having difficulty with it, thatis a service that we provide.
So if you want to go over anyof this, meet in one of our
offices in Shelby, charlotte orHendersonville.
Haley would be glad to meetwith you in Charlotte she's a

(04:06):
great attorney.
I am kind of exclusively inShelby and Hendersonville.
Or visit the website atwwwmcelderlawcom.
You can read all types ofarticles and watch videos on
fiduciary duties and trusts, andthen also give us a call at
1-888-999-6600.

(04:27):
Schedule a free consult.
We'd love to meet with you,thank you.

Haley Matson (04:31):
Thanks, bye.

Jordan McIntyre (04:33):
Bye, bye.