Named as Trustee? What You Need to Know

Someone named you as trustee of their trust. Maybe they told you in advance. Maybe you found out after they died. Either way, the role comes with real legal duties and real personal liability.

Accepting the Role

You do not have to serve. Under 20 Pa.C.S. § 7761, a person designated as trustee who has not accepted may reject the trusteeship. If you do not accept within a reasonable time after learning of the designation, you are deemed to have rejected it.

But be careful: you accept by exercising powers or performing duties as trustee, or by taking delivery of trust property. Even informal actions (like moving money from the trust account or paying trust bills) can constitute acceptance.

Your Fiduciary Duties

As trustee, you owe the highest legal duty to the beneficiaries:

Loyalty (§ 7772): You must administer the trust solely in the beneficiaries’ interests. No self-dealing, no conflicts of interest, no transactions that benefit you at the trust’s expense.

Impartiality (§ 7773): If there are multiple beneficiaries, you must treat them equitably; not necessarily equally, but fairly in light of the trust’s purposes.

Prudent administration (§ 7774): Administer the trust as a prudent person would, considering the trust’s purposes, provisions, and circumstances.

Prudent investment (§ 7203, Prudent Investor Rule): Invest trust assets as a prudent investor would, considering the trust’s overall investment strategy. Diversification is required (§ 7204) unless the trustee reasonably determines a concentrated position serves the beneficiaries’ interests. That requirement does not reach two categories of older trust: a trust that became irrevocable before December 25, 1999, and a trust created by a revocable instrument signed before December 25, 1999 that has not been amended since (§ 7204(b)). A trustee may also retain an asset received in kind, even one that makes up a disproportionately large share of the portfolio, so long as the trustee exercises reasonable care, skill, and caution (§ 7205).

Information (§ 7780.3): Pennsylvania did not adopt a general duty to proactively keep beneficiaries informed. The rule is narrower: you must promptly respond to a reasonable request for information about trust assets and transactions from the settlor of the trust, or, for an irrevocable trust, from a beneficiary (§ 7780.3(a)). On top of that request-based duty, two notices are mandatory whether or not anyone asks: within 30 days of learning of the settlor's death, you must notify the settlor's personal representative, spouse, children, and the trust's current beneficiaries (§ 7780.3(c)), and you must give written notice each time the trusteeship changes: to the settlor, while the settlor is alive and has not been adjudicated incapacitated, and, once the settlor has died, or, for an irrevocable trust, once the settlor has been adjudicated incapacitated, to the trust's current beneficiaries instead (§ 7780.3(g)).

Practical Steps

• Read the trust document. Thoroughly. It controls your powers and obligations
• Inventory trust assets. Know what the trust owns, where it is, and what it is worth
• Get a tax ID number if the trust needs one (always after the settlor ’s death for a formerly revocable trust)
• Open a trust bank account in the trust’s name. Never commingle trust funds with your own money
• Send required notices. Within 30 days of learning of the settlor’s death, the trustee of a revocable trust must notify the settlor’s personal representative, spouse, children, and the trust’s current beneficiaries (§ 7780.3(c))
• Keep detailed records of every transaction, every decision, and the reasons for it

Bond Requirements

Under § 7762, a trustee gives bond only if the court finds one is needed to protect beneficiaries or the trust requires it. Institutional trustees (banks, trust companies) are exempt even if the trust says otherwise. Many modern trusts waive the bond requirement.

Compensation

If neither the trust nor a written fee agreement signed by the settlor, or by someone the trust authorizes to sign one, sets the trustee’s compensation, the trustee is entitled to compensation that is reasonable under the circumstances (§ 7768(a)). What is “reasonable” depends on the trust’s size, complexity, the work involved, and the trustee’s expertise. Corporate trustees typically charge a percentage of assets under management (often 0.5% to 1.5% annually). Individual trustees may charge a flat fee, hourly rate, or percentage. If the trust instrument or such a fee agreement specifies compensation, the trustee is entitled to the specified amount. A court may still allow reasonable compensation that is more or less than the specified amount if the trustee’s duties have become substantially different from those contemplated, if the specified compensation would be unreasonable, or if the trustee performed extraordinary services that the fee terms do not cover (§ 7768(b)). A court may also reduce or deny a trustee’s compensation as a remedy for a breach of trust (§ 7781(b)(8)). One trap to watch: a compensation clause does not govern compensation paid out of trust principal unless it explicitly says so (§ 7768(a)).

Liability

A trustee who breaches a duty is personally liable for the resulting loss (§ 7782). This means your personal assets are at risk. Common areas of liability include imprudent investments, failure to diversify, self-dealing, delayed distributions, failure to file tax returns, and failure to inform beneficiaries.

Protection comes from proper documentation and process, not from good intentions.

Legal and factual content on this page was last verified: Aug. 2026. If you are reading this significantly after that date, confirm key provisions with current statute text or contact our office.