The Trustee’s Compliance Library

Trustees and beneficiaries don’t always see eye-to-eye on issues of trust administration and governance.  For the most part, the reasons for these disagreements are divergent beliefs about responsibility, duty, fairness, and transparency. Then the attorneys are called and nobody wins. At the heart of all of these conflicts is a single issue–did the trustee act…

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Case Study – Modifying Trust Distribution Rates

Last month the Anodos team worked on an interesting investment governance project that we thought you might find elucidating. Facts:  A grantor setup a “Net Income” trust in 1987 for the benefit of their grandchild.  The historic distribution rate from this trust, after all administrative expenses, has been 3.2%. (We know this by reviewing the last…

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A trustee’s duty to investigate conflicts of interest

Duty to Investigate: Section 2(d) of the UPIA directs, “A trustee shall make a reasonable effort to verify facts relevant to the investment and management of trust assets.” In response to this duty, a prudent trustee will investigate whether any conflicts of interest exist between the trust, the investment advisor, and the investment products or process the advisor has adopted.

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A Transitive Property of Fiduciary Duties?

If A = B and B = C, then A = C. This is the “transitive property of equality” that we learned in our remedial algebra classes so long ago. Is there a transitive property of fiduciary duties?  We know that the trustee owes duties of care to the trust beneficiaries. We also know that…

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An ERISA Trustee’s Duty of Loyalty

It’s hard to be an ERISA trustee. Many plan trustees have other pressing corporate responsibilities and few have the time or experience to become fiduciary governance experts. But fiduciary governance need not be a complicated subject. Good fiduciary governance, whether done for a massive $10 billion pension plan or a small 401k with a couple…

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Trustee’s duty to develop an administrative plan or “If you don’t know where you are going you might end up somewhere else.”

Duty to Develop a Plan: Section 2(a) of the UPIA directs, “A trustee shall invest and manage trust assets as a prudent investor would, by considering the purposes, terms, distribution requirements, and other circumstances of the trust.” In response to this duty, a prudent trustee will develop an administrative plan that projects the income and…

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