How much discretion does the trustee have?
How much discretion a trustee has in performing his or her duties varies from case to case. Some trusts do not give the trustee much, if any, discretion in performing his or her duties. For example, a mandatory trust may dictate that the trustee is to pay the beneficiary $2,000 a month for the next 10 years, and that is all the trustee is to do. Alternatively, other trusts are discretionary trusts, allowing the trustee to use his or her judgment in determining what beneficiaries should be given certain property, when they should be given it, how much they should be given, etc. Even these discretionary trusts can vary widely, as some give the trustee broad discretion while others keep the amount of discretion very narrow.
Regardless of the amount of discretion given to a trustee by the trust, he or she must always remember that they have to act in good faith and conform with the fiduciary duties and the duty of loyalty associated with their role as the trustee.