Trustee Must Have Duties. A trustee must have duties to perform. A trust in which the trustee has no duties is known as a “passive trust” or “passive trust” and the beneficiaries get the disposition outright.

Trustee as Beneficiary. EPTL 7-1.1 (When trust interests not to merge) shows that the trustee can be a beneficiary.

Authority

EPTL 7-1.1 When trust interests not to merge

A trust is not merged or invalid because a person, including but not limited to the creator of the trust, is or may become the sole trustee and the sole holder of the present beneficial interest therein, provided that one or more other persons hold a beneficial interest therein, whether such interest be vested or contingent, present or future, and whether created by express provision of the instrument or as a result of reversion to the creator’s estate.

Review Questions

Can the trustee be a beneficiary? Yes.

EPTL 7-1.1 When trust interests not to merge

A trust is not merged or invalid because a person, including but not limited to the creator of the trust, is or may become the sole trustee and the sole holder of the present beneficial interest therein, provided that one or more other persons hold a beneficial interest therein, whether such interest be vested or contingent, present or future, and whether created by express provision of the instrument or as a result of reversion to the creator’s estate.

Can the trustee be the only beneficiary? ???

  • Research

Practically, for a trustee to be liable for an inequitable, there must be harm that outweighs the cost of bringing a judicial accounting proceeding. “Some ‘wrongs’ are not financially worth righting,” states Lori Perlman, an estate-planning attorney in New York.