1

trustee

noun trust·ee \ ˌtrəs-ˈtē \
Updated on: 4 Dec 2017

Definition of trustee

1 a : a natural or legal person to whom property is legally committed to be administered for the benefit of a beneficiary (such as a person or a charitable organization)
b : one (such as a corporate director) occupying a position of trust and performing functions comparable to those of a trustee
2 a : one to whom something is entrusted
b : a country charged with the supervision of a trust territory
3 : trusty

Examples of trustee in a Sentence

  1. They were named as trustees to the child's estate.

  2. the museum's board of trustees

Recent Examples of trustee from the Web

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'trustee.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

First Known Use of trustee

1636


2

trustee

verb

Definition of trustee

trusteed; trusteeing
transitive verb
: to commit to the care of a trustee
intransitive verb
: to serve as trustee

First Known Use of trustee

1818


Financial Definition of TRUSTEE

trustee

What It Is

A trustee holds or manages cash, assets or a property title for a beneficiary. The trustee has a fiduciary duty to act in the best interest of the beneficiary.

Trustees play an important role for businesses and individuals. In many cases, trustees make sure that assets held on behalf of individuals or companies are not misused.

How It Works

Let's assume Company XYZ issues $100 million of bonds. Company XYZ will appoint a trustee, usually a bank, to act on behalf of the bondholders. The trustee maintains lists of the bondholders in addition to receiving and distributing interest payments. The trustee also monitors Company XYZ's compliance with the agreements and communicates with the bondholders when the issuer is not in compliance.

Companies often involve trustees in debt offerings, mergers, and other situations involving two parties, a large amount of money, and conditions under which the money moves between the parties.

Why It Matters

In our example, the trustee is effectively the go-between for Company XYZ and the bondholders (but its allegiance is to the bondholders), and the trustee receives a fee from Company XYZ for performing this role. The presence of a trustee also gives Company XYZ a single point of contact for the bondholders and eliminates a considerable amount of administrative work for Company XYZ.

As mentioned earlier, the trustee's job is to act in the best interests of the beneficiary. This responsitrusteelity is called fiduciary duty, and the trustee is legally obligated to uphold this duty. If the trustee fails to do so, they could be legally liable for damages.


TRUSTEE Defined for English Language Learners

trustee

noun

Definition of trustee for English Language Learners

  • : a person or organization that has been given responsibility for managing someone else's property or money through a trust

  • : a member of a group that manages the money of an organization


TRUSTEE Defined for Kids

trustee

noun trust·ee \ ˌtrə-ˈstē \

Definition of trustee for Students

: a person who has been given legal responsibility for someone else's property

Law Dictionary

1

trustee

noun trust·ee \ ˌtrəs-ˈtē \

legal Definition of trustee

1 : one to whom something is entrusted : one trusted to keep or administer something: as
a : a member of a board entrusted with administering the funds and directing the policy of an institution or organization
b : a country charged with the supervision of a trust territory
2 a : a natural or legal person to whom property is committed to be administered for the benefit of a beneficiary (as a person or charitable organization) : the holder of legal title to property placed in a trust — compare cestui que trust, settlor
b : one (as a corporate director) occupying a position of trust and performing functions comparable to those of a trustee

trusteeship

noun

2

trustee

verb

legal Definition of trustee

trusteed; trusteeing
transitive verb
: to commit to the care of a trustee
intransitive verb
: to serve as trustee


Seen and Heard

What made you want to look up trustee? Please tell us where you read or heard it (including the quote, if possible).

Love words? Need even more definitions?

Subscribe to America's largest dictionary and get thousands more definitions and advanced search—ad free!

WORD OF THE DAY

to make fruitful or productive

Get Word of the Day daily email!

Test Your Vocabulary

Star Wars Words Quiz

  • cu-jedi-training
  • The bounty portion of bounty hunters (such as Boba Fett) comes from a Latin word meaning
True or False

Test your knowledge - and maybe learn something along the way.

TAKE THE QUIZ
SCRABBLE® Sprint

Test Your Knowledge - and learn some interesting things along the way.

TAKE THE QUIZ

Love words? Need even more definitions?

Subscribe to America's largest dictionary and get thousands more definitions and advanced search—ad free!