Loyalty. The customs and practices of a corporate fiduciary require that it act with a duty of loyalty and in the best interests of the beneficiary. This fundamental tenet requires that the Trustee refrain from taking advice or direction that could conflict with the interests of the beneficiaries. Consistent with its duty of loyalty, a trustee is obligated to implement an investment strategy that protects and maximizes the beneficiaries’ interests. The trustee is also required to avoid acting in its self-interest, and to conduct itself with the highest degree of fidelity.

Prudence. The customs and practices of a corporate fiduciary require that it act with a duty of prudence to administer and manage the Trust with care, skill, and caution considering the purpose, terms, and distributional requirements of the Trust. If a delegation of duty is deemed necessary by the trustee, the trustee has a duty to prudently select, instruct, and monitor the delegated agent. The duty of prudence also requires that a trustee sufficiently diversify assets to minimize exposure to a single asset class, and to diversify in accordance with the Prudent Investor Rule in a cautious, skillful manner. Prudence also dictates that the trustee assign the most qualified, experienced personnel to administer the trust. Periodic reviews of the investment portfolio are prudent to verify that investment decisions conform to the purpose and terms of the governing instrument. In particular, the trustee should pursue an investment strategy that considers the reasonable production of income, the safety of capital, and growth of the trust’s corpus consistent with the duty of impartiality. If there were to arise a situation where a limitation on the trustee’s investment authority could materially affect or cause harm to the beneficiaries’ interests, the trustee is obligated to inform all interested parties, and should thereafter petition the Court for instruction, direction, and clarification.

Disclosure. The customs and practices of a corporate fiduciary require that it inform and account. The scope of that duty is defined by the terms of the governing instrument and applicable law. Such duty is fundamental to the trust relationship; a trustee must keep the beneficiaries reasonably informed of their interests in the trust, any significant developments during the course of administration, and any changes to the governing instruments that could affect their interests. The trustee must maintain clear, complete, and accurate books and records with respect to trust property. If such recordkeeping duty is delegated, the trustee has a duty to prudently select, instruct, and monitor the delegated agent. Certain circumstances may require the trustee to take affirmative steps to provide additional information. A corporate fiduciary is obligated to disclose its fees and compensation, and to ensure that interested parties understand the mechanics of how the fees and compensation are calculated/charged and in what intervals. It is also standard practice for the trustee to maintain a periodic, ongoing dialogue with beneficiaries regarding their interests.

Good Faith & Candor. The customs and practices of a corporate fiduciary require that it act with good faith and administer the Trust in accordance with both the terms of the trust and the interests of the beneficiaries. In effectuating this duty, a trustee must use reasonable care, skill, and caution, and utilize its facilities and skill in a transparent, truthful manner taking into consideration the goals and interests of the beneficiaries. If the trustee is not equipped or qualified to handle the trust, it has a duty to conduct due diligence and recommend independent, impartial alternatives. In the case where the trustee does not possess the requisite personnel, platforms, or resources to administer the trust in compliance with its fiduciary duties, it has a duty to inform interested parties of this fact, or, at the very least, implement processes to address these shortcomings.