A trustee is a person or entity designated by a person who creates a trust (grantor, settlor, or trustor) to manage and administer the trust for the benefit of the named beneficiary or beneficiaries. The trustee of a trust created for estate planning purposes is often the grantor, settlor, or trustor who created and funded the trust.
A trust agreement may designate one or more successor trustees who will become the trustee if the previous trustee dies, is unable to continue to serve as trustee, resigns as trustee, or is removed by court order following a lawsuit filed by the beneficiary or beneficiaries of the trust.
A trustee has a fiduciary duty to the beneficiary or beneficiaries of the trust. A fiduciary duty includes the highest duty of care (performance of duties under the terms of the trust agreement) and of loyalty (avoiding conflicts of interest) recognized in law.
In Texas, a trustee is responsible for managing a trust established by a grantor for the benefit of the trust's beneficiaries. The trustee's role is to administer the trust according to the terms set out in the trust agreement. It is common for the person who creates the trust to also serve as the initial trustee, and the trust document typically outlines the process for appointing successor trustees in the event the original trustee can no longer fulfill their duties due to death, incapacity, resignation, or removal by a court. Trustees in Texas are bound by a fiduciary duty, which is a legal obligation to act in the best interest of the beneficiaries. This duty encompasses both a duty of care, which requires the trustee to manage the trust assets prudently and in accordance with the trust's terms, and a duty of loyalty, which mandates that the trustee avoid conflicts of interest and prioritize the beneficiaries' interests above their own. Failure to adhere to these duties can lead to legal action by the beneficiaries and potential removal or other sanctions against the trustee.
