By John J. Stromberg
Warren Allen LLP
There are different responsibilities a trustee is required to uphold. If you have a trustee, it is a good idea to ensure that he or she is aware of these obligations.
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Duty to Administer the Trust:
The trustee must take actions that are in the best interest of the trust beneficiaries. If it becomes necessary to modify the trust due to the acquisition of new property, a trustee can still do so without jeopardizing their duty to adequately administer the original trust.
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Duty of Loyalty
A trustee involved in self-dealing or similar transactions that place the trustee’s own interests above those of the trust beneficiaries are prohibited. If your trustee is using income generated from your rental property for their own benefit, the trustee has breached their duty of loyalty.
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Duty of Impartiality
When multiple beneficiaries have an interest in the trust, the trustee must act impartially in managing the trust assets. If trust beneficiaries have an equal or unequal interest in rental income, the trustee’s duty of impartiality requires the trustee to proportionally distribute that income.
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Duty to Control and Protect Trust Property
Securely transferring control of rental property can be paramount in maintaining that property’s value and condition. The trustee must confirm the property is adequately insured against loss while in the trustee’s control, and must pay any taxes or liens imposed on trust assets to avoid foreclosure.
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Duty to Keep Records
Trustees must maintain adequate records that document all receipts and disbursements for the trust. The trustee should document receipts as either income or principal, and disbursements as expenses, capital expenditures, or distributions.
Final Words
This article only addresses a handful of the many duties required of a trustee in Oregon; please feel free to contact John Stromberg by email (stromberg@warrenallen.com) or phone (503-255-8795).
About the author:
John Stromberg assists clients in domestic relations, estate planning, and civil matters. He received his Doctor of Jurisprudence from Willamette University College of Law and attended the University of Oregon for his Bachelor of Arts degree. He is a current member of the Multnomah Bar Association Service to the Public Committee and has appeared at events informing the local community of available domestic relations resources.
