A Trustee’s Fiduciary Duties at the Start and End of Administration

Prior to the creation of a trust and at its termination, a trustee’s fiduciary duties are often ambiguous. It is argued that, where fiduciary duties do not exist, contract law may be found to govern the rights of the settlor, the trustee, and the beneficiaries. This article refutes this argument because under the principles of modern contract law, certain conduct may be permitted that would not be acceptable if fiduciary duties existed more clearly. The most common problems arise in three areas: (1) the seeking of a receipt and release by a corporate fiduciary upon an informal termination of a trust; (2) the acceptance of terms that a corporate fiduciary requires prior to a settlor appointing a corporate fiduciary as a trustee; and (3) the need for a trustee to give notice to trust beneficiaries. This article explores these potential clashes in the belief that a keen awareness of them can help to achieve fairer agreements and better trust administration