- 3 - Petitioner as Trustee The settlor also named his son, petitioner, trustee of the trust. Petitioner was the initial trustee of the trust and served until 1985. Petitioner served as trustee again from 1986 through at least the date the petition was filed. An unrelated person was trustee in the brief interim. The trustee has general authority to manage and distribute the trust’s assets and income. The trust agreement obligates the trustee to manage the corpus in a manner that would satisfy the purpose of allowing a distribution of the corpus to the settlor’s grandchildren after petitioner dies. All the powers the trustee has are subject to fiduciary duty limitations and subject to the limitations of the trust agreement. The trustee is restricted in dealing with the corpus and income by the prudent investor rule, is not allowed to engage in speculation, and is required to seek long-term growth and appreciation of the trust property, considering income production as well as the safety of the corpus. The trust agreement restricts each beneficiary from disposing of his or her interest in the trust. Arkansas law governs the interpretation of the trust agreement. Undistributed Net Income and Deemed Distributions Petitioner chose not to make or accept the mandated annual distributions of net income despite the requirement in the trustPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
Last modified: May 25, 2011