What must a trustee do with trust assets in relation to personal assets?

A trustee has a fiduciary duty to manage the trust's assets responsibly and in the best interest of the beneficiaries. This responsibility includes the requirement to segregate trust assets from personal assets. By maintaining this separation, the trustee ensures that the trust property is protected and not subject to claims from the trustee's personal creditors or for personal obligations.

Additionally, segregating trust assets allows for clear accounting and management of the trust's financial activities, ensuring that the trustee can distinctly track income, expenses, and distributions related to the trust. This practice upholds the integrity of the trust and helps to prevent any potential conflicts of interest that could arise if personal and trust assets were intermixed.

The maintenance of separate accounts also aids in complying with legal requirements and provides transparency to beneficiaries regarding the management of the trust. If trust and personal assets were combined, it could lead to mismanagement or even misappropriation of funds, breaching the trustee's fiduciary duties. Therefore, ensuring a clear distinction between these asset types is crucial for the proper administration of the trust.