By Sarah Stewart Legal Group
In February of this year, Lisa Marie Presley filed suit against Barry Siegel, Elvis Presley’s former business manager. Presley claims that Siegel squandered her $100 million inheritance down to tens of thousands of dollars while managing Elvis Presley’s trust he established for his family. Lisa Marie Presley is the only surviving heir to that trust.
Presley brought her suit in probate court, alleging the probate court system was the proper forum, since Siegel accessed the money as Trustee of the Presley trust. She alleges Siegel acted in his own best interests in spending the money, contrary to his role and responsibilities as Trustee.
Siegel tried to get the case thrown out. He argued Presley brought the suit in the wrong court. But, a Judge ruled this week that the suit could continue.
Presley’s case accuses Siegel of ignoring his responsibilities as Trustee to manage the trust. A Trustee has certain duties and rules he or she must follow when handling trust assets. If Presley prevails in proving Siegel breached these duties and responsibilities, he could be liable to her for the money he lost.
If you are choosing a Trustee, or have been named a Trustee yourself, you should be aware of the duties Trustees have. Your trust document will control a lot of the responsibilities and duties of the Trustee, but if the document is silent as to some responsibilities, the default duties are below:
(1) Duty of Loyalty
Trustees must be loyal to the beneficiaries of the trust. Trustees must manage the trust in the best interests of the beneficiaries and not gain anything personally from the business they conduct for the trust.
(2) Duty of Fariness
Unless the Trust makes specific provisions otherwise, the Trustee must be fair and impartial to all beneficiaries and treat them equally.
(3) Duty to Account
Trustees must provide beneficiaries with information about the administration of the trust. This includes information about the income and expenses of the trust and the assets in the trust.
(4) Duty to Protect Trust Assets
Trustees must follow the terms of the trust when managing the assets of the trust.
(5) Duty to Separate
Trust assets must be owned by the trust and kept separate from the Trustee’s personal assets. Trustees cannot comingle the trust’s assets with their own.
(6) Duty of Care
Trustees cannot invest trust assets in high risk investments. They must keep the beneficiaries in mind at all times. Trustees must also manage the assets of the trust carefully, paying all bills associated with the trust and taking proper care of income from the trust.
Choosing your own Trustee can be difficult when you consider the many challenges Trustees face when managing estates. Being a Trustee can be a hard job. It becomes harder the more assets the Trustee must manage for the trust.
If you have questions about establishing a trust and choosing a Trustee, or acting as a Trustee of an existing trust, reach out to an experienced Estate Planning attorney today!