Lessons for Trustees and Beneficiaries Part II- Safeguarding Trust Property

A Trustee must take reasonable steps to take control of and protect trust property.  Hence, if it is tangible property, property that you can touch and hold like antiques, an art or coin collection, cars, etc., the Trustee must take physical possession of that property and ensure that it is protected.  This can mean using a safety deposit box or a secure storage unit when appropriate. 

A Trustee must also keep trust property separate from his own property.  Trust property should never be intermingled with a Trustee’s own property.  A Trustee should keep good records concerning all trust property. 

Failure to safeguard trust property can open a Trustee up to a Breach of Duty action by a beneficiary to recoup any losses caused by a Trustee’s failure to protect the Trust property.  Prior to any Breach of Duty action, the Trust must be consulted as liability of Trustees is often limited by the Trust document.

Whether you are a Trustee or Beneficiary, lack of knowledge of your responsibilities or rights can be costly.  Consider consulting a trust administration attorney for guidance.

To read Part I of this series on What is a Trust and Who Has to Know About it see http://www.perlalaw.com/blog/lessons-for-trustees-and-beneficiaries-part-i-what-is-a-trust-and-who-has-to-know-about-it/