Gregory E. Robinson, P.C.

Missouri law provides that a trustee must not favor one beneficiary over another beneficiary.  Although the trust might allow the trustee to treat different beneficiaries differently, when doing so, the trustee must consider each of the beneficiaries’ interest when doing so.  The trustee cannot benefit one beneficiary over another based on his or her personal feelings or even based on is understanding of the desires of the grantor, but rather must look to the terms of the trust.

The trustee has certain duties with regards to administering the trust.  These duties are called Fiduciary Duties.  The fiduciary duties can be spelled out in the trust but there are also fiduciary duties that are spelled out in the Missouri Uniform Trust Code. An experienced fiduciary lawyer can guide you through this portion of the administration of a trust. There are four main general fiduciary duties, they are:

• Duty to Administer the Trust;
• Duty of Loyalty;
• Duty of Impartiality; and
• Duty of Prudent Administration

In addition to the four general fiduciary duties set forth in the Missouri Uniform Trust Code, the trustee has a duty to give personal attention to trust administration.  The fiduciary relationship between the trustee and the beneficiaries was classically defined as a personal relationship and non-delegable. The modern theory is that some powers of the administration of the trust may be delegated to an agent, provided however, that the trustee retains supervision over the agent. Missouri law provides in part, that a trustee may delegate to an agent duties and powers that a prudent trustee of comparable skill could properly delegate under the circumstances. The trustee shall exercise reasonable care, skill and caution in:

1. Selecting an agent;
2. Establishing the scope and terms of the delegation, consistent with the purposes and terms of the trust; and
3. Periodically reviewing the agent’s actions in order to monitor the agent’s performance and compliance with the terms of the delegation.

In delegating any authority, the trustee must make sure that he or she is not violating one of the other fiduciary duties.

What is trust administration and when do you need a trust administration lawyer? Trust administration occurs whenever a trust has been created and a trustee has accepted the trusteeship. If the trust is a grantor trust and the only trustees are the grantors of the trust, the trust administration is very easy and no formal requirements need to be followed. However, if any of the trustees are not grantors of the trust, certain formal requirements come into play. They can include the requirements to notify beneficiaries or account for the actions taken by the trustees. Some of the requirements are set forth in the trust instrument and others are set forth by the state legislature. This is especially trust when a grantor passes away., but it can also be trust is while the grantor is living and is no longer a trustee or if the trust is not a grantor trust. Our attorneys will be happy to help you fulfill your Fiduciary Duties whether you are the grantor of the trust, an initial trustee or a successor trustee.

Missouri law provides that a trustee shall administer the trust as a prudent person would, by considering the purposes, terms, distributional requirements, and other circumstances of the trust. In satisfying this standard, the trustee shall exercise reasonable care, skill and caution.  The duty of prudent administration requires that the trustee exercise “reasonable care, skill and caution” while serving as a trustee.  Although many trust documents state that the trustee does not need to follow the prudent investors rules as set forth in Section 469.908 RSMO, if there is a dispute as to whether a trustee breached the Duty of Prudent Administration, courts tend to look at the same factors as they would look at to see if the prudent investor rules where required.

One of the most fundamental duties of a trustee is the duty of loyalty. The duty of loyalty is well known and has been the subject of numerous books and various law school classes. The duty of loyalty has been fodder for many cases when a beneficiary of the trust has alleged that the trustee breached the duty of loyalty. Missouri law states in part that a trustee shall administer the trust solely in the interests of the beneficiaries.

As stated in the Uniform Trust Code comments to this section, a trustee owes a duty of loyalty to the beneficiaries, a principle which is sometimes expressed as the obligation of the trustee not to place the trustee’s own interests over those of the beneficiaries. The duty of loyalty is the foundation for the relationship that the trustee has with the beneficiaries.