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A trust is a legal entity created under state or federal law by a property owner to hold property for the benefit of another for various reasons. Every trust has an explicit, stated purpose for existing. A trust can own, buy, and sell all types of property. With the proper written provisions, a trust can exist for a lengthy period of time.
Trusts are controlled by a trustee, a role that the law has defined as having the highest honor while requiring the utmost care. The trustee is a "fiduciary" to the beneficiaries of the trust and is held to the highest of legal standards in the performance of his or her duties. Failure to do so leaves the trustee personally accountable under the law. Beneficiaries can sue the trustee for breach of fiduciary duty, which can involve not only the trustee's intentional acts of malfeasance but also any unintentional acts of negligence.
Why this severity? Because the trustee holds actual legal title to the trust assets and must administer, or oversee, these assets according to the express terms and provisions of the actual trust documents. The beneficiaries are those entitled to receive benefits from the trust; however, they do not hold legal title to the trust assets themselves. The trustee is the property owner for the life of the trust. The law is strict in recognition of the temptations that are inherent in this scenario. If you are serving as a trustee, contact an attorney at Capshaw Green, PLLC, to help you navigate the many pitfalls of trust administration.