What are some of the fiduciary responsibilities owed by a trustee to the beneficiaries?

The trustee has several major duties:

Loyalty: The greatest duty is for the trustee to be loyal to the beneficiaries. The trustee must administer the trust solely for the benefit of the beneficiaries, and provide full disclosure of his or her dealings. The trustee must deal fairly with the beneficiaries, and not manage the trust to profit his or her own financial interests (i.e., by buying stock in a company the trustee owns).

Administration: The trustee has a positive obligation to do what is necessary for the good of the trust.

Productivity: If the purpose of the trust is to maximize assets over time, the trustee owes a duty to make productive investments.

Earmark: The trustee must keep trust assets separate from all other assets, including those of the trustee, and must clearly identify those assets belonging to the trust in all dealings.

Account: The trustee must provide financial statements regarding the state of the trust.

Nondelegation: Because the trustee holds legal title, only the trustee may manage the trust.

Diversification: If the trust involves investment of assets, the trustee must diversify the trust's holdings as a prudent investor would do with his or her own money.

Impartiality: The trustee must act for the benefit of the trust as a whole, and not favor one beneficiary's interests over another's.

If a trustee breaches his or her duties under the trust, the beneficiaries may sue him or her for any damages to their interests.