As a trustee, you are acting as what Texas law calls a fiduciary. A fiduciary is held to a very high standard of conduct, and all actions you take as trustee are subject to four main duties: 1) loyalty 2) competence 3) reasonable discretion and 4) full disclosure.
Duty of Loyalty
Your duty of loyalty means that you must always put the needs and interests of the trust beneficiary ahead of your own. This duty also prohibits you from making a transaction that benefits yourself and/or does not benefit the trust.
Duty of Competence
The duty of competence encompasses many aspects of trust administration. First, you must personally be familiar with the property that is in the trust and administer the trust property yourself. While you may employ professionals such as accountants and attorneys to assist in trust administration, you cannot delegate this administration duty to another person or entity. You must obtain control of trust property a reasonable time after you become trustee, and you must keep that property safe from harm.
Once the assets are under control, your duty of competence obligates you to exercise ordinary skill and prudence in managing trust assets. Because a beneficiary can seek an accounting from you at any time, you are obligated to keep clear and accurate accounts at all times. If there is a co-trustee, you both have these same duties and cannot shift duties to the other trustee.
Duty to Exercise Reasonable Discretion
As a trustee, you have power to make decisions that affect trust property. Many trusts give trustees broad discretionary power, and trustees must make such decisions based on what is fair and reasonable to all beneficiaries within the terms set forth in the trust. If a court finds that a trustee abused the discretionary power, the court may undo the trustee’s actions, which could subject the trustee to additional action.
Duty of Full Disclosure
Since you are administering the trust for the benefit of the beneficiaries, you have a duty to give them complete and accurate information about the trust administration and property upon reasonable request. All beneficiaries have the same right to this information, including beneficiaries with future interests.