Fiduciary governance records and questions checklist

Trustee selection and succession

Trustee succession records name who holds the role and who follows. Utah fills a required trustee vacancy first by the trust's designated successor, then by unanimous agreement of qualified beneficiaries, then by court appointment.

• The trust names each trustee and each designated successor.
• Provisions describe how a trustee is removed and replaced, as practitioners describe with a professional trustee serving beside a family member.
• Practitioners describe a fiduciary discharger with sole discretion to remove a third-party fiduciary without cause and appoint a successor.
• Family office governance documents set decision rules for hiring, firing, investment committee formation and manager selection.

Delegation and directed trust records

Delegation records show who holds which function. Descriptions of the Model UTC note that a trustee who properly delegates a function must still monitor the agent's performance and compliance with the delegation terms. Practitioners note that a directed trust depends on a trust agreement that establishes the structure and on state law that allows it.

• Written delegation terms identify the agent and the function delegated.
• Monitoring records show the agent's performance and compliance with those terms.
• Records of information passed between a trustee and a trust director cover the powers or duties of both, as Florida practitioners describe.

Accounting and asset review records

Accounting records show what a trustee holds and why. Georgia limits a trustee to costs that are appropriate and reasonable in relation to the assets, the trust's purposes and the trustee's skills.

• An inventory and detailed transaction records support efficient accounting and responses to beneficiary requests, as an author describes.
• Records show how current beneficiaries' needs and future beneficiaries' interest in preserving assets were weighed.
• The authors ask whether sound record keeping policies and clear decision processes exist across a succession of trustees.

Clauses and asset-specific risk records

Exculpatory clause records show who drafted the clause. Under Virginia law, an exculpatory clause drafted or caused to be drafted by the trustee is invalid as an abuse of a confidential relationship unless the trustee proves it was adequately communicated to the settlor.

• A record shows whether the clause was communicated to the settlor in Virginia.

Common questions