When a person passes away, the individual responsible for overseeing the estate administration process is usually an executor. However, Ontario residents who choose to put some or all of their wealth in a trust will also name trustees. This person or persons are responsible for managing this portion of the estate administration, so it is important to clearly understand their duties and responsibilities in order to select and prepare the right person for the job.
A fiduciary duty is a legal obligation an individual has to act in the best interests of another party. Under their fiduciary duties, trustees must make decisions in the best interest of the assets in the trust and the trust’s beneficiaries. They must also follow all instructions laid out in a trust document. An example of this duty in action would be investments made with the assets. These investments must be conservative and minimal in risk with reasonable growth potential.
In many cases, individuals will name themselves and their spouse as co-trustees. When one co-trustee passes away, the other takes full responsibility for managing the trust. When all co-trustees pass away, a successor trustee takes on the responsibilities outlined above in order to support the transition of the assets to the beneficiaries in accordance with the trust’s instructions.
Whether one chooses an individual or an organization to manage their assets, the same three elements of fiduciary duty apply. These are: loyalty, care and full disclosure. Beneficiaries who feel the successor trustees are not fulfilling these duties, or those who have other questions and concerns about a trust as part of an estate plan, can reach out to an Ontario lawyer for advice and support.