What is the fiduciary relationship between a trustee and the beneficiaries?
The fiduciary relationship between a trustee and the beneficiaries is one of trust and responsibility. The beneficiaries of an estate trust or other entity such as a corporation have a right to expect that the trustee will handle the assets and funds of the trust or corporation with complete trustworthiness and good faith. A trustee has a duty of loyalty to the beneficiaries and must act solely in their interest. This fiduciary relationship means that the trustee must take all reasonable steps to ensure that the funds from the trust or corporation are used on the behalf of the beneficiaries. The trustee must always put the beneficiaries first and cannot use the funds to further the interests of the trustee. In addition, the trustee has a duty of loyalty to the beneficiaries of the trust or corporation and must provide them with accurate and prudent advice in order to protect their interests. The trustee must also be guided by the rules and regulations set forth in the trust or corporation and must keep records and accounts of all transactions. The trustee is also required to disclose any financial interests they may have in the trust or corporation as well as any conflicts of interest. The trustees must also provide the beneficiaries with a written accounting of all transactions undertaken on their behalf. The fiduciary relationship between a trustee and the beneficiaries is a relationship of trust and responsibility. As such, a trustee must act in the best interest of the beneficiaries and must be honest and transparent in their dealings with them.
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