Trustee – What is it, definition and concept | 2022

The trustee is a person or organization in charge of managing the assets of a third party.

This person or entity is responsible for the maintenance, performance and profitability of the settlor’s assets. The latter is the name by which people who allocate goods to the administration by third parties are known.

Likewise, the settlor and beneficiary of the trust are not necessarily the same person or organization.

By virtue of a commitment, the person must handle foreign assets and money in accordance with ethics and the law. Such asset management must always be subject to the benefit of the owner of the assets. Therefore, the decisions will be based on maximizing the profitability and utility of your beneficiary.

Duties of the trustee

The duties of the trustee can be summarized as follows:

  • Execute trusted instructions: This is the primary duty of a trustee and the reason for their appointment. So he must make the right decisions at the right time.
  • act in good faith: The actions you take must be legitimately to benefit the principal. In addition, you must act only in the interest of the beneficiary in handling the assets.
  • Be loyal: In this case it refers to the rectitude of the administrator’s actions. In other words, avoid benefiting oneself from the decisions made within the framework of asset management. Likewise, the trustee must keep his own assets separate from those of others.
  • proceed with diligence: That is, keep your activity with the utmost care and treat your work records in a professional manner. Therefore, decisions must have logical and quality justifications. Keeping accurate and detailed records will indicate trustee transparency and avoid legal conflicts.
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Objectives and powers of the trustee

Each agreement establishes the specific duties of the trustee, the previous section is a meaning of the general duties of the same. Therefore, the actions depend on the interests of the beneficiary or beneficiaries and the type of assets that will be held in the trust.

These guidelines, responsibilities and objectives are dictated in the trust agreement. The objective that is invariable is that the people indicated in the trust should benefit.

On the other hand, the trustee must ensure that the liability agreements fit within the applicable legal framework. In this sense, they are obliged to fully interpret and understand the contract. They must also confirm that all assets are safe and of legitimate origin before executing the contract.

Finally, these actions must be frequently communicated to the beneficiaries. Mainly, when the assets are productive and part of their profitability must be given.

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