trustee powers and duties

Question 1

implied power

Answer 1

1. power to sell property
2. power to incur expense
3. power to lease
4. power to borrow (CLAW no power but OK now)

Question 2

duties

Answer 2

duty of loyalty - must act in the best interes tof the beneficiary at all times. Requires trustee administer the trust for the benefiti of the benefiicairy with no other considerations in mind

a. must turn over suplus
b. must turn over self dealing

duty to invest -
1. state lists - some states have lists which trustee must follow in the abense of direciton from trust - ged gov bonds, federally insured CD, first deeds of trust in RE, stometimes stock

2. common law pruden person test - duty to invest requires tha thte trustee act as a reasonably purdent person investing his own property, trying to maximize income while preserving corpus. If has greater skill, must do that
   EACH IND. INVESTMENT IS SCRUTINIZE
   good investments = govenrmetn bonds, CD, first deeds in RE, blue chip stocks, mutual funds
3. uniform prudent investor act - must ac tas prudent investor - test the entire portfolio not each individual investment. really broad ability to invest

Question 3

duty to earmark

Answer 3

requires trustee to label trust property as trust property

consequences
prior - you’re held liable with no causation needed to be shown
modern - failure to earmark and loss, held perosnally liable only if loss was caused by failure to earmark

Question 4

duty to segregate

Answer 4

trustee can’ tcommingle

Question 5

duty not to delegate

Answer 5

trustee can rely on professional advisors in reaching devision but can’t delegeate decision making authority

modern trne dis they can delegate to manager

trusteees can act by majority decision

Question 6

duty to account

Answer 6

give beneficairy es a statemetn of income and expenses on regular basis

Question 7

duty of care

Answer 7

act as reasonably prudent person dealing in his own affariars