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The standard of care expected of a trustee is that of a prudent man dealing with the property of another, and if the trustee has special skills or is named trustee on the basis of representations of special skills or expertise, he is under a duty to use those skills. Mich. Comp. Laws § 700.813; Mich. Stat. Ann. § 27.5813. To be prudent includes acting with care, diligence, integrity, fidelity and sound business judgment. In addition, the courts have imposed on the fiduciary duties of honesty, loyalty, restraint from self-interest and good faith.
The estate trustees determined that the liquid assets of the estate were insufficient to satisfy the cash bequests, the funding of a trust fund for the decedent's granddaughter, the estate taxes, and the administrative expenses. The estate trustees decided to sell certain real property of the estate in order to raise funds. The trust beneficiaries filed objections. The probate court removed the trustees. Consequently, the estate trustees appealed.
Was the decision to remove the estate trustees erroneous?
The court found that because the real property was the single most valuable asset of the estate, the estate trustees had a duty to inform all of the beneficiaries of the impending sale, and the lower court did not err when it found that that duty had been breached. The court also found that estate trustees had a duty to make adequate efforts to determine the value of the property, and the record did not indicate that the lower court clearly erred in finding that the estate trustees did not fulfill their duty of establishing the value of the property. Accordingly, the lower court’s order that removed the estate trustees was affirmed.