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General Info.

The primary duty of any trustee is to the beneficiaries. It makes no difference whether the trust is testamentary or inter vivos. The first sentence of O.R.C. Section 1340.02 reads, “A trust shall be administered with due regard to the respective interests of income beneficiaries and remaindermen.” Ohio courts have recognized the significance of the trustee’s duty to the beneficiaries. One court’s decision states that “cases and authorities uniformly require the trustee at all times to sustain an ”.

The trustee must receive letters of appointment from a probate court prior to commencing administration of a testamentary trust. The court will not issue letters of appointment unless the trustee signs a written acceptance of the trustee’s duties. The trustee must acknowledge that he may be removed for failing to perform his duties and is subject to possible penalties for converting property held in trust. 

The authority of a trustee is defined and limited by the terms of the trust instrument. The trustee has the power to carry out the duties that are imposed by the terms of the trust instrument. The trustee has only the authority granted by the trust and cannot exceed the limits of the authority so granted. The trustee implements the intent of the settler of the trust; this intent is determined from the terms of the trust.

The trustee must file an inventory with the probate court of all assets under his control and file an accounting of all additions and expenditures from the trust every two years pursuant to O.R.C. Section 2109.303.

It may be more efficient for a trustee to file annual accounts on a calendar year basis as trusts must file federal income tax returns on a calendar year basis, and it is easier over the life of the trust to prepare an annual account and then prepare the federal and state income tax returns, while one’s memory is fresh.