When it comes to estate planning, one of the most important decisions you’ll make is who will be your trustee. This person is responsible for overseeing the distribution of your assets after you die, and ensuring that all required legal documents are filed correctly and on time.
CA Trustee Statutes
In order to discharge their fiduciary responsibilities, trustees must adhere to certain release of liability statutes.
The most common statute governing trustee releases is the Uniform Trust Code (UTC), which was adopted by many states. The UTC requires trustees to release any party from any claim against the trustee arising from the performance of the trustee’s duties, unless the release would prejudice the beneficiary’s rights. The UTC also requires trustees to disclose all material facts pertaining to any potential claims.
Several other states have enacted similar releases of liability statutes. For example, in California, the Code of Civil Procedure provides that a trustee “shall not be liable for any act or omission in connection with his office except as expressly authorized by statute.” The statute specifically includes among those authorized acts the discharge of liability for civil damages. Additionally, under California law, a trustee is exempt from personal liability for an act or omission that is within the scope of his duties and that does not result in gross negligence or willful misconduct.
Trustees should be aware of these releases of liability statutes and trust beneficiary release form use them as a guideline when deciding whether to discharge a potential claim. Start preparing your accounting with Barrattorneys Company.
Release of Trustee’s Liability
The California Trustee Law (CALTRL) allows a trustee of a trust to release their liability for the actions taken in the course of their trustee duties. To be eligible for release, the trustee must demonstrate reasonable cause and good faith.
Under CALTRL, reasonable cause is determined based on the circumstances of each case. Good faith is established by showing that the trustee acted in good faith and with an intention to act in the best interest of the trust.
To be eligible for release, a trustee must also provide notice to all affected persons and file a release statement with the court. A release statement must include: (1) the reasons for seeking release; (2) a description of any changes made to the trust since the trustee took office; and (3) an explanation of why it is reasonable to believe that no further liability will arise from their actions as trustee.
If the court approves a release statement, the trustee is no longer liable for actions taken in the course of their duties as trustee.
What are the Requirements to be a Trustee?
A trust must be established by an act of the settlor (the person who establishes the trust) or by a deed in writing executed by the settlor and another person. The settlor may be any natural person, but the trust cannot be created by a corporation, limited liability company, joint venture, partnership, or other business organization.
The trustee is a fiduciary who is responsible for managing the assets of the trust and protecting the rights of beneficiaries. The trustee must meet certain requirements in order to hold this position, including being a resident of California and having a legal capacity to enter into contracts. The trustee cannot be an employee or affiliate of the settlor or beneficiary.
The trustee must file a declaration of trust with the California Secretary of State within 30 days after establishing the trust. This declaration should include information such as the name of the trust, the names and addresses of all settlors and beneficiaries, and descriptions of all property owned or controlled by the trust. The trustee must also provide monthly accounting reports to all beneficiaries and file annual income tax returns for trusts with taxable income.