Future Business Leaders of America (FBLA) Business Law Practice Exam

Who is a trustee?

1. A person who manages a trust for another's benefit

2. A financial advisor for businesses

3. A court judge overseeing trust agreements

4. An individual receiving benefits from a trust

The correct answer is: A person who manages a trust for another's benefit

A trustee is defined as a person who manages a trust for another's benefit, which highlights their role as a fiduciary. In this position, the trustee has the responsibility to administer the trust assets in accordance with the terms of the trust document and for the benefit of the beneficiaries. This includes making decisions about investments, distributions, and overall management of the trust according to the instructions set forth by the trust creator. The trustee must act in good faith and in the best interest of the beneficiaries, upholding their duty of loyalty and care. In contrast, the other choices do not accurately represent the role of a trustee. A financial advisor may provide guidance related to financial matters but does not necessarily manage a trust as a fiduciary. A court judge might oversee legal matters including trust disputes but is not involved in the direct management of a trust. An individual receiving benefits from a trust is known as a beneficiary, not a trustee. Thus, the distinctive responsibility and authority of a trustee in managing a trust legally establishes why option A is the correct answer.