What are the three responsibilities of a trustee?

What are the three responsibilities of a trustee?

• A. Fiduciary duties
• B. Custody, Investment management, and Administration
• C. Distributions and accounting
• D. Powers and discretion

Answer: (B)

The main idea here is what a trustee actually has to handle in managing a trust: keeping assets safe, making and overseeing investments, and handling the trust’s day-to-day administration. Custody means securely holding and protecting the trust assets and keeping proper title and records. Investment management involves choosing, monitoring, and adjusting investments to meet the trust’s goals and rules while balancing risk and return. Administration covers the ongoing tasks that keep the trust running—distributions to beneficiaries as allowed by the trust, thorough record-keeping, and providing accounting and tax reporting to the beneficiaries and the court or grantor as required. When you put these together, they reflect the three core practical responsibilities a trustee performs to carry out the trust. Fiduciary duties describe the broad obligations of loyalty, prudence, and impartiality that guide a trustee’s behavior, not a specific set of day-to-day tasks. Distributions and accounting are important parts of administration, but they’re only one piece of the administrative work. Powers and discretion refer to the authority to act, not the whole bundle of practical duties.

The main idea here is what a trustee actually has to handle in managing a trust: keeping assets safe, making and overseeing investments, and handling the trust’s day-to-day administration. Custody means securely holding and protecting the trust assets and keeping proper title and records. Investment management involves choosing, monitoring, and adjusting investments to meet the trust’s goals and rules while balancing risk and return. Administration covers the ongoing tasks that keep the trust running—distributions to beneficiaries as allowed by the trust, thorough record-keeping, and providing accounting and tax reporting to the beneficiaries and the court or grantor as required. When you put these together, they reflect the three core practical responsibilities a trustee performs to carry out the trust.

Fiduciary duties describe the broad obligations of loyalty, prudence, and impartiality that guide a trustee’s behavior, not a specific set of day-to-day tasks. Distributions and accounting are important parts of administration, but they’re only one piece of the administrative work. Powers and discretion refer to the authority to act, not the whole bundle of practical duties.