The Role of the Trustee of a Trust Established Under a Last Will and Testament Following Probate

HNWEstate Administration and Probate

  • probateStatutory and case law requires a trustee to diversify trust assets. Under the Prudent Investor Act, N.J.S.A. 3B:20-11.1 [to] -11.12, “[a] fiduciary shall diversify the investments of the trust unless the fiduciary reasonably determines that, because of special circumstances, the purposes of the trust are better served without diversifying.” N.J.S.A. 3B:20-11.4. A trustee is under a duty to the beneficiary to exercise prudence in diversifying the investments so as to minimize the risk of large losses.

Under NJ trust law, a trustee should not invest a disproportionately large part of the trust estate in a particular security or type of security.”

One must examine the provisions of the Will which create the trust to evaluate a trustee’s conduct with respect to prospective trust assets.

Does the trust contain ambiguous commands (i.e., does it identify a date certain upon which the Trust terminates, does it provide any deadline by which distributions must be made, does it limit the trustee’s powers while he/she is accomplishing the specified duties? Absent some manifest expression of the settlor’s intent, the trustee’s conduct is limited by only the underlying law of NJ.

This underlying law grants a trustee wide discretion to carry out the administration of a trust.

To discuss your NJ trust and estate administration matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at  Please ask us about our video conferencing or telephone consultations if you are unable to come to our office.

By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold Township, Monmouth County, NJ Estate Administration Attorney

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