When making an encroachment for a beneficiary, the trustee should reference which document?

The trust instrument is fundamentally important when a trustee is considering an encroachment for a beneficiary. This document serves as the primary governing authority for the management of the trust and outlines the specific terms, conditions, and limitations regarding how trust assets can be utilized.

In the context of encroachment, which typically involves the use of principal assets for the benefit of a beneficiary, the trust instrument will specify whether encroachments are permissible and under what circumstances. It defines the rights and interests of the beneficiaries, including any stipulations about how much can be withdrawn or used, and for what purposes.

This careful oversight ensures that the trustee acts within the legal boundaries established by the trust and maintains the fiduciary duty to all beneficiaries involved. The trustee must adhere to the language and spirit of this instrument to avoid potential disputes among beneficiaries and to ensure that the interests of the trust are upheld.

While other documents or considerations may hold value in specific circumstances, the trust instrument remains the definitive source that informs the trustee’s actions regarding encroachments.