A trust that requires that the trustee abide by the terms of the trust

• A. Trust agreement
• B. Power of attorney
• C. Declaration of trust
• D. Will

Answer: (A)

The main idea here is that the document that actually binds a trustee to follow the terms of the trust is the trust agreement. This instrument lays out the trust’s terms, names the trustee, and sets the duties, powers, and limitations the trustee must adhere to. It creates the fiduciary relationship and provides the framework for how the trust is to be administered, including how distributions are made and what standards the trustee must meet. A power of attorney governs someone’s authority to act for them in personal or financial matters but does not establish or govern a trust’s terms. A declaration of trust can be used to create a trust or to evidences ownership in the trust, but in many contexts the trust agreement is the formal instrument that expressly binds the trustee to abide by the trust’s terms. A will deals with testamentary dispositions after death and does not govern the ongoing administration of a living trust.