Let’s discuss how the Trustee’s pay can affect the Trustee’s Standard of care. Is your Trustee asserting they can do low-quality work because they do not receive payment? Or has your Trustee proposed to reduce their pay because their work was not up to par? Or does my Trustee working for free affect their Standard of care? Then possibly, your Trustee is not doing their duty adhering to the Standard of Care and could be breaching their fiduciary duty. 

Here at The Grossman Law Firm, we have been helping and guiding our clients through proper Trust Administration for over twenty years. We pride ourselves on educating our clients on their rights as a beneficiary, which includes understanding their Trustee’s duties.

Further, this article and video will guide you through whether a Trustee receiving pay or working for free affects the Trustee’s Standard of care and performance in administering the Trust.

• What is the Trustee’s Standard of Care?
• Does my Trustee working for free affect their Standard of care? 
• What to do next after you find out your Trustee breached their fiduciary duty?

What is the Trustee’s Standard of Care?

A Trustee’s Standard of Care is an obligation to meet a certain measure of care when managing the Trust. 

A Trustee must meet these standards to manage Trust assets properly. That means if your Trustee does not meet the Standard of Care of a Trustee, they are breaching their fiduciary duty. If your Trustee breaches their fiduciary duty, as a beneficiary, your Trust has taken a loss, and you should probably consider removing them as a Trustee. 

For more information on the duties of a Trustee and their Standard of Care duties, check out our article, “Understanding the Trustee Standard of Care.”

Does my Trustee working for free affect their Standard of care? 

It is not unusual in family situations for a family member serving as Trustee to work for free. A family member who is a Trustee may feel it isn’t right to get paid or feel pressured by family members to work without compensation. Some people think it is immoral to hold the person working for free to the same Standard as a person working for pay, whatever your personal feelings are about this. And unless the Trust excuses the Trustee’s performance because the Trustee is an amateur or not paid, your Trustee must be held to the same Standard of care as any other trustee.

That means, regardless of whether your Trustee is receiving money or inexperienced as a Trustee, they must adhere to the same Standard of care as any experienced or paid Trustee. 

So what happens when your Trustee breaches their Standard of care duties? 

What to do next after you find out your Trustee breached their fiduciary duty? 

Suppose your Trustee breaches their fiduciary duty by failing to adhere to their Standard of Care duties. In that case, your Trust may have taken a loss. 

That is why it is vital as a beneficiary to familiarize yourself with a Trustee’s Standard of Care and if they are breaching their fiduciary duties. 

A Trustee’s breach of their fiduciary duty usually results in a financial loss to you, the beneficiary. If this is the case, evaluate what that failure has cost you. In that case, it’s time to consider taking action and removing them as a Trustee. You should first consider whether there has been any loss due to your Trustee?

 If there has been any loss, you probably want to consider a petition to: 

1. Surcharge (i.e., get damages against) the Trustee;
2. Seek prejudgment interest; and
3. Seek post-judgment interest.

Do you have more questions about filing a petition?  Check out our article, “What to Include in a Petition for Court Oversight of a Trust.”