Trustee

Generally -- § 111.004(18) Holds legal title. Must act in accordance with fiduciary standards. Trustee’s legal title: cannot be reached by trustee’s creditors, and is not in trustee’s estate upon death.

Capacity -- § 112.008 Trustee must be able to: Take title, Hold title, and Transfer title to trust property.

Capacity Individuals: 18 (or disabilities of minority removed), and Competent. Trustee may be the settlor and/or a beneficiary (as long as sole trustee is not sole beneficiary).

Capacity Corporations Power to act as trustee Financial institutions (no separate charter needed) Trust companies (separate charter needed) Foreign corporations if comply with Estates Code Chapter 505

Acceptance -- § 112.009 Importance No liability until acceptance. Cannot force a person to accept. Blieden v. Greenspan – p. 555

Acceptance -- § 112.009 Methods Signature of trustee = conclusive evidence Exercise power or perform duty = presumption of acceptance, unless Preservation, if notice given, or Inspection.

Acceptance -- § 112.009 Reasons to accept: Reasons to not accept:

Acceptance -- § 112.009 If trustee does not accept: Trust instrument names alternate. Trust instrument provides method of selecting alternate. Court appointment upon petition of interested person.

Bond -- § 113.058 A. B.

Bond -- § 113.058 Presumption = required Not required if: Waived by settlor in trust (unless court nonetheless requires), or Corporate trustee. Why?

Bond -- § 113.058 Why require bond? Why waive bond?

Multiple Trustees -- § 113.085 Possible benefits: Possible dangers: Note: Majority may act. Common law and some states still require all co-trustees to join in the exercise of a power.

Resignation -- § 113.081 Follow procedure settlor provided in the trust. Otherwise, Petition court for permission to resign. Practice tip = include procedure in trust instrument

Removal -- § 113.082 Details later when we cover trust enforcement.

Successor Trustee -- § 113.083 If no trustee remains: Successor named by settlor. Replacement method specified in trust. Court may appoint on its own motion. Court must appoint on petition of interested person.

Successor Trustee -- § 113.083 If at least one trustee remains: Successor named by settlor. Replacement method specified in trust. Court will not fill vacancy. If charitable trust, remaining trustees may fill vacancy by majority vote, even if trust silent. Why does statute allow this? 1. __________________ 2. __________________

Successor Trustee -- § 113.084 Powers: Presumption = same as original Exceptions: Trust instrument provides otherwise. Court order provides otherwise.

Successor Trustee – Finance Code ch. 274 Substitute Fiduciary Act Why may what this Act allows be important to your client?