Trustees and the DC Uniform Trust Code
A DC trusts lawyer can assist a trustee throughout the entire administration of the trust. Often, a trust lawyer will advise the trustee of his or her fiduciary obligations. However, an attorney may also assist with preparing a plan for distribution or continued management of the trust, assist with preparing accountings, required notices, and generally, help to minimize the burden of the trustee.
Excising Trustee Authority
The Uniform Trust Code provides that once a trustee accepts his duties, the trustees will administer the trust in “good faith, in accordance with the terms and purposes and trust of the beneficiaries and in accordance with the other provisions of the Uniform Trust Code.”
To show their authority to marshal assets and manage the trust, often a trustee will be required to provide the applicable trust provisions that reflect his or her authority to serve to the financial or banking institution.
Generally, a trustee can resign from serving as a trustee, and to do so they would provide 30-day notice to the qualified beneficiaries and the settler of the trust, if living, as well as any co-trustees.
Trustee Standard of Care
The Uniform Trust Code in Title 19 of the DC Code states, “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”.
Conditions For Court Removal of Trustee
The Uniform Trust Code in Title 19 of the DC Code provides specific reasons for why or how the court can remove a trustee. And generally, the Code states that a settlor, a co-trustee, or beneficiary of a trust may request the court to remove a trustee, which is important to note. Generally, courts do not actively administer trusts. Matters regarding trust are usually brought to the court’s attention by a settlor who is the grantor, the person that created the trust, a co-trustee, or a beneficiary and that individual will request the court to assume jurisdiction but typically only for one specific matter.
The code provides the following grounds to petition the court for removal:
1) The trustee has committed a serious breach of trust;
(2) Lack of cooperation among cotrustees substantially impairs the administration of the trust;
(3) Because of unfitness, unwillingness, or persistent failure of the trustee to administer the trust effectively, the court determines that removal of the trustee best serves the interests of the beneficiaries; or
(4) There has been a substantial change of circumstances or removal is requested by all of the qualified beneficiaries, the court finds that removal of the trustee best serves the interests of all of the beneficiaries and is not inconsistent with a material purpose of the trust, and a suitable cotrustee or successor trustee is available.
The term “exculpatory provision” is one that is used in a lot of contracts to law and, essentially, it is a clause that releases a trustee from liability when performing his or her actions as a trustee. However, typically, exculpatory provisions do not protect the trustees for actions that they may have taken in bad faith or gross negligence.