Serving as Trustee Without a Safety NetServing as Trustee Without a Safety Net

Serving as a trustee requires managing risk. That takes many forms—among them, requesting or requiring the consent of a trust’s beneficiaries before a trustee performs a discretionary act (or, alternatively, a release of liability for doing so). This isn’t to say that a trustee seeks consent to actions it knows would otherwise breach its fiduciary duties; prudent trustees won’t perform a discretionary act if it clearly contravenes the trust’s governing instrument or its duties to the beneficiaries. Rather, because trusts can seem complicated to a layperson, and trust and tax law even more so, trustees may fear that even if they take the prudent course in exercising discretion to act a certain way, one or more beneficiaries may not fully ...