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Fiduciary Duties of Trustees and Personal Representatives.

Trustees and personal representatives have nearly identical fiduciary obligations. Under Hawai’i Revised Statutes (“HRS”) § 554D-802 (a), a trustee has “duty of loyalty” to, “[]administer the trust solely in the interest of the beneficiaries.” It’s not uncommon for trustees to also be beneficiaries. This usually arises when parents who settle a trust designating their children as beneficiaries, and name one of them successor trustee. HRS § 554D-803, provides, “If a trust has two or more beneficiaries, the trustee shall act impartially in investing, managing, and distributing the trust property, giving due regard to the beneficiaries’ respective interests.” That means it’s improper for a son or daughter who is a beneficiary and trustee, to use their powers as trustee to advantage themselves over other beneficiaries.


Most trusts have accompanying pour over wills. A personal representative’s primary obligation is to follows the intent of the testator as expressed in his or her will, and a trustee’s duty is to carry out the grantor/settlor’s wishes as expressed in their trust. “It is a fundamental principle that the intent of the settlor, as expressed in the trust instrument, shall prevail, ‘unless inconsistent with some positive rule of law.’" In re Ishida-Waiakamilo Legacy Tr. Dated June 27, 2006, 138 Hawai‘i 98, 102-03, 377 P.3d 39, 43-44 (App. 2016) (Internal citations omitted). A court must take all of a trust’s terms into account, which “should be considered in relation to each other . . .” In re Annie Quon Ann Lock Revocable Tr., 109 Hawai‘i 146, 152, 123 P.3d 1241, 1247 (2005) (internal citations & quotation marks omitted). Where there is no ambiguity in a trust’s terms, any act which contradicts the plain language of a trust is effectively a modification, interpretation or repudiation of those terms; (see generally, In re Elaine Emma Short Revocable Living Tr. Agreement, 2019 Haw. App. LEXIS 327 at 14 & 16, 144 Hawai‘i 391, 442 P.3d 454 (App. 2019).  


The trust holds legal title to the grantor’s assets (often referred to as the “res” or “corpus” of the trust), and the beneficiaries hold “equitable title”. Only the trustee has powers to write checks on trust accounts or sell trust property. When trustees abuse their powers and violate the terms of a trust agreement, particularly to benefit themselves at the expense of beneficiaries or the grantor, they have committed a “breach of trust”, and are liable for damages; (see e.g. Richards v. Midkiff, 48 Haw. 32, 43, 396 P.2d 49, 56 (1964)).

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