Placeholder Image Robert Ross, Attorney at LawHelping People Seeking Justice Downtown in the EveningBreach of Contract & Business Torts Meeting RoomLegal Malpractice & Professional Negligence Outside of a modern HouseReal Estate & Construction Litigation Emergency Room SignWrongful Death  Personal Injury Litigation

What is a Professional Trustee?

WHAT IS A PROFESSIONAL TRUSTEE?

A trustee is the person (or entity, acting through an authorized individual representative) that manages trust property (also known as the trust estate). In the case of family trusts or individuals’ private trusts, the trustee usually is a private individual, either the settlor or one of the settlor’s friends or relatives (and, in many family trust situations, the trustee may be a beneficiary also).

Legally speaking, a “professional trustee” is a person who serves as a trustee:

  • on behalf of three or more non-related individuals (meaning three people who are not related to the trustee by marriage, blood, adoption, or registered domestic partnership); or
  • a person acting as a professional administrator, handling the practice of a professional fiduciary who has died or become legally incapacitated.

However, pursuant to Section 6501 of the California Business and Professions Code, the following persons and entities are not professional fiduciaries – even if hired to oversee or manage trust property in some capacity:

  • A trust company, as defined in the California Probate Code
  • An FDIC-insured institution, as well as its holding companies, subsidiaries, and affiliates
  • A public agency
  • A nonprofit corporation or charitable trust that satisfies certain requirements (listed in the B&P Code)
  • A person who is employed by or acts as an agent on behalf of any of the entities listed above, to the extent that person is acting within the course and scope of the employment or agency relationship
  • A person who acts as a professional fiduciary only as a properly registered broker-dealer, broker-dealer agent, investment advisor, or investment advisor, or as a trustee on behalf of certain companies regulated by the SEC.

PROFESSIONAL TRUSTEES MUST BE LICENSED

The California Business and Professions Code requires all “professional fiduciaries” to obtain and maintain a Professional Fiduciary license, and to comply with the licensing, ethics, and regulatory standards that govern the behavior of professional fiduciaries. A person who acts as a professional fiduciary without obtaining a license (and who is not exempt from the licensing requirement) is subject to fines, civil damages, sanctions, criminal prosecution, and other consequences and penalties.

However, licensed CPAs, lawyers, and IRS agents do not require a license to act as professional fiduciaries, if they undertake those duties as part of their professional practice activities.

Before hiring a professional trustee to manage your trust, be sure to confirm that the person or company you’re hiring is either properly licensed or exempt from the licensing requirements. Don’t be afraid to ask the question–and to require proof. If you are the beneficiary of a trust, and suspect that the person or entity acting as a professional trustee may not be properly licensed, or is violating the licensing requirements, consult a lawyer for an evaluation of the situation.

***

Disclaimer: THIS ARTICLE IS FOR INFORMATIONAL PURPOSES ONLY, AND DOES NOT CONSTITUTE LEGAL ADVICE OR CREATE AN ATTORNEY-CLIENT RELATIONSHIP BETWEEN THE AUTHOR OR ROSS LAW AND ANY PERSON. Your legal rights and experiences may vary. Never use an online article (including this one) to evaluate your legal rights or claims. Consult an experienced attorney promptly to obtain a personalized evaluation of your claims, potential damages, and the various legal rights and options available to you.

You may lose or compromise your rights if you delay in consulting legal counsel. Most legal claims (and defenses), as well as legal and court procedures, are complicated and fact-dependent. If you believe you have a claim against someone who injured you, a lawyer who represented you in a previous lawsuit, or any other legal claim, consult an experienced lawyer immediately for an evaluation of your individual rights and claims.

Designed and Powered by NextClient

© 2015 - 2024 Robert S. Ross. All rights reserved.
Custom WebShop™ law firm website design by NextClient.com.

Quick Contact Form - Tab