In Massachusetts, a fiduciary is defined as an individual, bank, trust company or corporation that charges clients for administering a trust or an estate. Furthermore, the entity or individual must have gross annual compensation for all of its fiduciary services that is more than $25,000 for the last three years.
A fiduciary’s main set of powers stems from the trust instrument itself. Because every trust is different, it is impossible to predict exactly what powers a fiduciary will have as individual clients can designate different powers for their fiduciary. Some trusts may keep the fiduciary’s powers very limited while others may provide for broad powers.
A fiduciary can generally invest funds of the trust. Additionally, he or she can invest a portion of the trust estate into a common or pooled fund. However, he or she must provide the owner of the trust with information regarding the history of the fund, its purpose, the investment policies, provisions regarding capital gains and dividends, compensation for the management of the fund and other information provided by statute.
Additionally, fiduciaries can hold securities as part of the trust agreement. Unless the trust instrument says differently, a fiduciary can register, deposit or hold securities that are of the same class of the same issuer, hold, deposit or register securities in the name of a partnership or corporate nominee of the fiduciary’s choosing, hold, register or deposit securities in a clearing corporation or securities depository, register, hold or deposit securities as uncertificated securities or register, hold or deposit securities with any federal reserve bank. The fiduciary is responsible for maintaining records regarding these securities. Additionally, the fiduciary is responsible for certifying in writing the securities that are registered, held or deposited if a court or interested party demands such.
A trust fiduciary is responsible for carrying out the responsibilities included in the trust agreement. A lawyer may discuss options pertaining to the enumerated powers to give the fiduciary so that the trust creator’s wishes are carried out.
Source: The General Court of Massachusetts, “CHAPTER 203 TRUSTS“, October 03, 2014
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