About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

36 Quinnipiac Prob. L.J. 277 (2022-2023)
Beneficiaries as Trustees: Here's the State of Things

handle is hein.journals/qplj36 and id is 305 raw text is: QUINNIPIAC PROBATE LAW JOURNAL VOLUME 36 2023 ISSUE 3 BENEFICIARIES AS TRUSTEES: HERE'S THE STATE OF THINGS Richard C. Ausness* I. Introduction It is not unusual for settlors to appoint beneficiaries as trustees.' However, there are serious risks associated with this practice. This Article will examine some of these risks and suggest ways to reduce them.2 Part II describes why settlors appoint beneficiaries as trustees. Part III identifies some of the cases that have arisen where other trust beneficiaries have charged trustee beneficiaries with breach of fiduciary duties such as the duty of loyalty, impartiality, and prudence, as well as the duty to inform and report. Part IV explores a number of cases which have involved common trust arrangements such as revocable inter vivos trusts, discretionary trusts, support trusts and marital trusts. Part V describes various drafting options and other measures that might reduce the chances of litigation by other beneficiaries. II. Beneficiaries as Trustees A private trust is a fiduciary relationship in which one or more persons hold legal title to property for the benefit of the equitable owners.3 In most cases, the settlor appoints a trustee to manage the trust's assets. If the trust is a large one, the settlor may choose a corporate fiduciary such as a bank or trust company to act as the trustee. On the other hand, settlors sometimes prefer to appoint family * Stites & Harbison Professor of Law, University of Kentucky Rosenberg College of Law. B.A., 1966, J.D., 1968, University of Florida; LL.M., 1973, Yale Law School. I would like to thank the University of Kentucky J. David Rosenberg College of Law for supporting this research with a summer research grant. Deborah S. Gordon, Trusting Trust, 63 KAN. L. REv. 497, 499 (2015). 2 Many of these issues can occur when family members are appointed as trustees even if they are not beneficiaries. See generally, Richard C. Ausness, Keeping It in the Family: The Pitfalls of Naming Family Members as Trustees, 34 J. AM. ACAD. MATRIM. L. 1 (2021). 3 GEORGE T. BOGERT, TRUSTS, 1 (§ 1) (6th ed. 1987).

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most