The Fiduciary Duties Of A Trustee

A trust is a relationship whereby property is held by one party for the benefit of another. A trust is created by a settlor, who transfers some or all of his or her property to a trustee. The trustee holds that property for the trust’s beneficiaries. Trusts have existed since Roman times and have become one of the most important innovations in property law. Now trust has become the most important way of property management. However, there is huge moral hazard of a trustee to the beneficiary in the trust system, which is this trustee is likely to erroding the benefits for his personal gain. In order to ensure the excellent function of trust, how to do a good protection for the profits of beneficiary becomes the most important issue in the research on the trust. The core duty for a trustee to the beneficiary under trust law is fiduciary duty. And a comprehensive and explicit standard for fiduciary duty is the best way to deal with this important issue. In fact, there are many vague rule for the fidiciary duty in China, which is negative to behavior regulation of trustees and bad for the protectiong for benificiary’s trust profits.Therefore, this paper has given over a discusion of the fiduciary duty of a trustee in three parts, so as to give a good example for building the standard of the fiduciary duty of trustees in trust law of China. The first part has canvassed the basis of the theory of fiduciary duties of a trustee. The second part did a research on the connotation and characteristics of the concept-the fiduciary duties of a trustee. It has canvassed some ways which Britian and America try to regulate the behavior of trustees in administering the trusts. The last part has found the weakness in the behavior regulation of fiduciary duties and made an attempt to table some proposals for how to perfect the fiduciary duties system.