What is the fiduciary relationship between a trustee and the beneficiaries?
A fiduciary relationship is a special relationship between a trustee and the beneficiaries of an estate or trust. In Massachusetts, this relationship requires a trustee to act in utmost good faith with loyalty and dedication to the beneficiaries of the trust. A trustee is legally obligated to use the assets of the trust solely in the interests of the beneficiaries and to manage the trust’s assets prudently. The obligations of a trustee are quite extensive under Massachusetts law. The trustee must provide the beneficiaries with accurate information about the trust’s assets and must keep accurate records of all transactions on behalf of the trust. The trustee must also ensure that the trust assets are invested wisely and that money is always available for potential distributions to beneficiaries. Finally, the trustee must abide by the terms of the trust and follow any instructions from the grantor, or the person who established the trust. The fiduciary relationship between a trustee and the beneficiaries is serious and is intended to ensure that the trust is managed in the best interests of the beneficiaries. It is important to note that this relationship also places great responsibility on the trustee to manage the trust in a competent and ethical manner. As such, Massachusetts law provides remedies for any breach of the fiduciary duty of the trustee. These remedies may include the removal of the trustee, compensation to the beneficiaries, disgorgement of the trustee’s profits, or criminal penalties.
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