A trustee holds legal title to property for the benefit of one or more beneficiaries. The trustee usually has designated powers and often has discretion regarding how to perform his or her duties. The discretion is usually part of what lawyers call a distribution standard.
A trustee’s service begins upon acceptance of the trust[1] and continues through termination of the trust or until resignation or removal.[2] A trustee has legal capacity to acquire, hold and transfer title to property.[3] Individuals, regardless of citizenship, may serve as trustee.[3A] Corporations, partnerships and other entities may serve as trustees if they have power to act as a trustee in Georgia.[4] Where there is no trustee, or where a trustee must be replaced, the trust instrument may designate a successor, a method for naming a successor or a court may fill the vacancy;[5] nonetheless, if there is no method for appointing a successor, then a court with jurisdiction over the trust may appoint one since a trust will not fail for want of a trustee.[6]
Where there are co-trustees, powers may be delegated among them, and surviving co-trustees may act for the trust when there is a vacancy in the office of co-trustee or when a co-trustee is unable to act.[7] Co-trustees hold property as joint tenants with survivorship. When one trustee dies, title to the trust property passes to the surviving trustees.[8]
Trustees have those powers described in the trust as well as statutory powers.[9] Among the inherent powers of a trustee is power to deviate from the trust terms if, owing to circumstances not known to the settlor and not anticipated by him, compliance with a trust term would defeat or substantially impair accomplishment of the trust’s purpose.[10] A trustee may correct a known mistake, so long as it’s action are not in bad faith, are not an abuse of discretion and are not inconsistent with the settlor’s original intent.[11] Successor trustees have the powers of the original trustees unless otherwise provided in the trust.[12]
A trustee shall administer the trust solely in the interests of the beneficiaries.[13] Except where the trust instrument states otherwise, a trustee has a duty of impartiality based on what is fair and reasonable to all beneficiaries, including income and remainder beneficiaries.[14] The trustee is accountable to the beneficiary for the trust property and a violation of any duty owed to the beneficiary is a breach of trust;[15] and each co-trustee has a duty to the beneficiaries in administering the trust and to use reasonable care to prevent a co-Trustee from breaching a trust duty.[16] A beneficiary may bring an action for breach of trust,[17] and may recover damages.[18] Claims against a trustee must be brought within two years if a report was provided to the beneficiary adequately disclosing the claim; if there was no disclosure then any claim against a trustee must be brought within six years.[19]
