What is the document that binds the trustee to the terms?

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

Answer: (D)

A trust operates through a trust instrument that binds the trustee to its terms. This document lays out who is in charge (the trustee), who benefits (the beneficiaries), what assets are placed into the trust, and the duties, powers, and distribution rules the trustee must follow. Because the trustee’s fiduciary duties and authority come directly from that instrument, the trust agreement is the binding document controlling how the trust is administered. A will mainly governs asset distribution at death and may appoint a trustee for any testamentary trust, but it does not bind a living trustee in the same way as the trust instrument. A declaration of trust can perform a similar function in some cases, but the formal, operative binding instrument used to govern ongoing trust administration is the trust agreement. A power of attorney, by contrast, authorizes an agent to act for someone else and does not create or govern a trust.