Revocable and Irrevocable Living Trusts
Trustee's Interest in the Trust Property
One of the fiduciary relationships which arises is between a Trustee and both the Trustor and the Beneficiaries. A Trustee will be most responsible for managing the assets transferred to him/her in Trust and for making sure that these assets earn an appropriate amount of money, if they are assets which should do so. For example, a Trustee may have a duty to trade stocks, rent property, purchase or sell property or similar duties. The failure to do certain duties may be a breach of this fiduciary duty to either the Trustor or the Beneficiaries.
Trustees have no legal interest in the property transferred to them in trust. They cannot sell this land for their own profit, nor can they pledge any property as collateral for a personal loan to the Trustee. They must act in the best interests of the Trust. It cannot be over-emphasized that the property they hold is never for their own benefit [unless they are ultimately one of the beneficiaries.] A failure to act in a manner consistent with the law of the applicable state and in the best interests of the Trust, may make a Trustee personally liable to the Trust, the Trustor and/or the Beneficiaries.