Specific Powers of the Trustee

1. UTC § 816 supplies a non-exhaustive catalog of twenty-six specific trustee powers. The catalog is illustrative; it does not narrow the general grant of UTC § 815(a) but confirms that the enumerated powers are within it.
2. Every specific power is a fiduciary power. Its exercise is governed by the coordinate duties of loyalty (Chapter 7), impartiality (Chapter 8), prudent administration (Chapter 9), standard of care (Chapter 11), and good faith (Chapter 6).
3. The specific powers are organized functionally: acquisition and disposition (§ 816(2)–(5)); management and preservation (§ 816(6)–(10)); investment and financial (§ 816(1), (11)); operation of business and securities (§ 816(6), (7), (18)–(20)); administration (§ 816(11)–(15)); litigation and dispute resolution (§ 816(17), (23), (25)); and distribution and termination (§ 816(21), (22), (24), (26)).
4. The specific catalog reflects settled commercial expectations. Third parties transacting with a trustee — banks, brokers, title insurers, counterparties — rely on the enumerated powers as confirmation of statutory authority, and UTC §§ 1012–1013 protect that reliance where the counterparty acts in good faith and for value.
5. The catalog does not diminish the trustee's implied and common-law powers. Where a needed authority is not enumerated but is appropriate to proper administration, it is available under UTC § 815(a)(2)(B).
6. The specific powers are subject to displacement by the terms of the trust. A settlor may restrict or condition any enumerated power; a settlor may not, within the mandatory floor of UTC § 105(b), eliminate the fiduciary duties that regulate their exercise.
7. The exercise of every specific power requires the same deliberative discipline described for general powers in Chapter 19: identification of the source, verification of authority, alignment with trust purposes and beneficiary interests, informed decision, coordinated duties, deliberative record, and disclosure in ordinary reporting.
8. Judicial review of the exercise of specific powers is process-based and available in every jurisdiction. Abuse of power — bad-faith exercise, self-dealing, imprudence, action beyond authority, or failure to act — supports the ordinary fiduciary remedies of surcharge, restitution, removal, and instructions under UTC §§ 1001–1002.
9. The catalog closes but does not exhaust the modern law of trustee authority. Coordinate statutes — the Uniform Prudent Investor Act, the Uniform Principal and Income Act, the Revised Uniform Fiduciary Access to Digital Assets Act — supply additional specific powers for their respective domains.
10. Volume II closes with this chapter. The trustee's office, from acceptance through commencement, fiduciary duties, administration, protection, reporting, discretion, and general powers, is now complete in its statutory articulation. Volume III will treat the doctrine of liability, remedies, and the enforcement of the fiduciary standard.

Upon completing this chapter, the reader should be able to:

1. State the doctrinal architecture of UTC § 816 and its functional relationship to the general grant of § 815.
2. Trace the historical development of statutory trustee powers from the Uniform Trustees' Powers Act (1964) through UTC § 816 (2000).
3. Identify each of the twenty-six specific powers enumerated in § 816 and place each within a coherent functional taxonomy.
4. Apply the specific powers to concrete transactional problems — acquisition, sale, lease, borrowing, investment, business operation, litigation, distribution, and termination.
5. Analyze the fiduciary constraints — loyalty, impartiality, prudence, good faith, trust purposes, beneficiary interests — that govern every specific exercise.
6. Evaluate the exercise of specific powers over specialized asset categories: real property, personalty, financial assets, business interests, and digital assets.
7. Diagnose common misconceptions concerning the scope, breadth, and reviewability of specific trustee powers.
8. Prepare a specific-power exercise protocol satisfying the requirements of § 816, the applicable state statutes, and the standards of the Restatement (Third).
9. Integrate the specific powers with the fiduciary duties developed throughout Volume II.
10. Summarize the doctrinal arc of Volume II and articulate the doctrinal transition to Volume III.

• Uniform Trust Code § 816 (specific powers of trustee) — twenty-six enumerated powers of collection, retention, acquisition, sale, exchange, deposit, investment, real-property management, tangible-personalty management, business operation, security-holder rights, borrowing, contracting, guaranty, insurance, expenses, litigation, settlement, employment, distribution, division, and termination.
• Uniform Trust Code § 815 (general powers; the doctrinal foundation of the § 816 catalog); § 815(a)(1) (instrumental powers); § 815(a)(2)(A) (owner-equivalent powers); § 815(a)(2)(B) (implied powers); § 815(c) (limitations imposed elsewhere in the Code).
• Uniform Trust Code §§ 105(b) (mandatory rules), 201 (petitions for instructions), 801 (duty to administer), 802 (loyalty), 803 (impartiality), 804 (prudent administration), 806 (special skills), 807 (delegation), 813 (duty to inform and report), 814 (discretionary powers), 1001–1002 (remedies for breach), 1010 (fiduciary-capacity contracting), 1012–1013 (third-party protection).
• Restatement (Third) of Trusts §§ 85 (general powers), 86 (specific powers), 76 (duty to administer), 77 (prudent administration), 78 (loyalty), 79 (impartiality), 80 (delegation), 82 (duty to inform), 83 (recordkeeping and segregation).
• Restatement (Second) of Trusts §§ 186 (powers), 190 (sale), 191 (lease), 192 (mortgage), 193 (investment), 194 (taxes and expenses), 195 (compromise), 196 (employment), 197 (leases of long duration), 227 (prudent-investor rule).
• Uniform Prudent Investor Act §§ 2 (standard of care), 3 (diversification), 4 (duties at inception), 7 (investment costs), 9 (delegation of investment functions).
• Uniform Principal and Income Act (as revised) — allocation of receipts and disbursements between principal and income.
• Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA) — statutory authority over digital assets, terms-of-service coordination, and the priority hierarchy for fiduciary access.
• Leading state statutes implementing UTC § 816: Cal. Prob. Code §§ 16220–16249; Fla. Stat. § 736.0816; Tex. Prop. Code §§ 113.001–.028, .151–.171; Ohio Rev. Code § 5808.16; Va. Code § 64.2-778; Del. Code tit. 12, §§ 3325, 3326; N.Y. E.P.T.L. § 11-1.1.
• Landmark decisions: Estate of Rothko, 43 N.Y.2d 305 (1977) (abuse of specific powers and self-dealing); Matter of Janes, 90 N.Y.2d 41 (1997) (retention power and prudence); Estate of Baldwin, 442 A.2d 529 (Me. 1982) (scope of sale power); First Ala. Bank v. Spragins, 515 So. 2d 962 (Ala. 1987) (investment power and its limits); Wood v. U.S. Bank, N.A., 160 Ohio App. 3d 831 (2005) (extended powers); In re Estate of Cooper, 913 P.2d 393 (Wash. Ct. App. 1996) (business-operation power); Guin v. Ha, 591 P.2d 1281 (Alaska 1979) (borrowing and mortgaging).

• Austin Wakeman Scott, William Franklin Fratcher & Mark L. Ascher, Scott and Ascher on Trusts (5th ed.) §§ 17.1–17.15, 18.1–18.10, 19.1–19.6 (the specific powers and their exercise).
• George Gleason Bogert, George Taylor Bogert & Amy Morris Hess, The Law of Trusts and Trustees (3d ed. & Supp.) §§ 551–570, 741–812 (specific powers, transactions, and limits).
• Charles E. Rounds Jr. & Charles E. Rounds III, Loring and Rounds: A Trustee's Handbook (current ed.), ch. 3, §§ 3.1–3.6 (specific powers and their fiduciary exercise).
• Robert H. Sitkoff & Jesse Dukeminier, Wills, Trusts, and Estates (11th ed.), ch. 9 (trustee powers and duties).
• John H. Langbein, The Uniform Trust Code: Codification of the Law of Trusts in the United States, 15 Trust L. Int'l 66 (2001).
• John H. Langbein, The Contractarian Basis of the Law of Trusts, 105 Yale L.J. 625 (1995).
• Restatement (Third) of Trusts, Reporter's Notes to §§ 85, 86.
• American College of Trust and Estate Counsel, ACTEC Commentaries (current ed.) (specific powers and their exercise).
• Uniform Law Commission, Uniform Trust Code Comments to §§ 815–816.

The specific powers enumerated in UTC § 816 discharge two distinct doctrinal functions. First, they eliminate residual uncertainty about common transactions. A trustee asked whether it may open a brokerage account, execute a lease, participate in a corporate reorganization, or compromise a claim can point to the specific statutory grant and answer without hesitation. Third parties transacting with the trustee — bankers, brokers, title officers, litigants, counterparties — obtain equivalent assurance. The catalog thus stabilizes the commercial ordinary and reduces the transaction costs of trust administration.

Second, the catalog articulates the settled expectations of modern trust practice. Each enumerated power reflects an accumulated body of case law and drafting convention. The statute confirms in one place what would otherwise require the trustee, in each administration, to search through decisional authority, coordinate acts, and instrumental provisions. The catalog is not new law; it is the codification of the modern trustee's operational toolkit, presented in a form usable in daily practice.

UTC § 816 opens with the phrase 'without limiting the authority conferred by Section 815.' The clause is deliberate. The specific catalog does not exhaust the trustee's authority; it exemplifies it. Where a needed power is enumerated, the statute confirms it. Where a needed power is not enumerated but is appropriate to proper administration, it remains available under § 815(a)(2)(B). Chapter 19 (General Powers of the Trustee) treats the general grant in doctrinal depth; the present chapter treats its specific applications.

The relationship is analogous to that between a code of civil procedure and the common-law forms of action it supersedes. The code supplies a workable inventory for the ordinary case; the general principle supplies the answer where the inventory is silent. A trustee should not, however, treat the inventory as an outer limit. Reliance on § 815 for unlisted powers is the design of the statute, not a doctrinal contortion. The prudent trustee cites the specific power when one is available and cites § 815(a)(2)(B) when none is.

The exercise of every specific power remains fiduciary. UTC § 815(c); § 816 preamble (powers subject to the duties of the Code). The statutory grant supplies authority; the fiduciary framework governs its use. This dual character — expansive authority disciplined by fiduciary duty — is the animating principle of the modern law of trustee powers and the throughline of Volume II. A trustee who invokes a specific statutory power without regard to loyalty, impartiality, prudence, standard of care, and good faith has misunderstood the statute. The catalog empowers the trustee to act; it does not license the trustee to act privately.

The point is important because the enumerated powers may appear, in the abstract, to be plenary. The power to sell is unqualified in its statement; the power to borrow is unqualified in its statement; the power to compromise is unqualified in its statement. But no fiduciary act is unqualified. Every enumerated power is exercised subject to the coordinate duties. The statutory text supplies the transactional capacity; the fiduciary duties supply the standard by which each transaction is measured.

The pre-statutory law of trustee powers required the settlor to enumerate every anticipated transaction in the instrument or the trustee to justify each unenumerated act as a necessary implication from the trust's purposes. The result was drafting prolixity — instruments running to many pages of granular grants — and administrative caution, with trustees seeking court authorization for anything that fell outside the safe harbor of express enumeration. The friction was real, and reform pressure accumulated throughout the first half of the twentieth century.

The Uniform Trustees' Powers Act (1964) supplied the first comprehensive uniform response. It codified a substantial catalog of ordinary trustee powers exercisable without court approval, subject to fiduciary duty. Widespread state adoption relieved the drafting burden and freed administration from routine judicial intervention. The Act's substantive core — a comprehensive statutory catalog paired with a general fiduciary constraint — became the template for the modern law.

UTC § 816 (2000) consolidates the earlier reforms and modernizes them. It preserves the ordinary catalog, updates it to reflect modern investment practice (delegation to advisors, use of pooled vehicles, participation in securities markets), and integrates it with the coordinate uniform acts governing investment, principal-and-income allocation, and digital assets. The section is drafted to be self-executing: no court order is required for any enumerated power, and no independent instrumental grant is required to make it available.

Jurisdictions adopting the UTC have preserved § 816 substantially intact. Where variation exists, it typically concerns particular categories of specialized property — closely held business interests, environmental exposure, digital assets — that have received amplified statutory treatment. The uniform character of the substantive rule reflects a settled national judgment: the modern trustee needs comprehensive statutory authority and fiduciary discipline, not narrow enumerations paired with judicial oversight of routine transactions.

UTC § 816 enumerates twenty-six specific powers organized as a workable operational inventory. In summary form, they include: (1) to collect and receive trust property; (2) to receive additions; (3) to acquire an undivided interest; (4) to invest and reinvest; (5) to acquire or sell property; (6) to exchange or partition property; (7) with respect to real property, to make ordinary or extraordinary repairs, to demolish, to erect improvements, to raze, to develop, to lease, to grant options; (8) to enter into a lease for a period of years extending beyond the term of the trust; (9) with respect to a mineral, gas, or oil interest, to explore, drill, and take related actions; (10) to grant options concerning the disposition of trust property; (11) to deposit trust money in a regulated financial institution; (12) to borrow money and to grant a security interest; (13) with respect to a business owned by the trust, to continue or participate in its operation and to change its form; (14) to institute, maintain, or defend litigation involving the trust; (15) to settle and compromise claims; (16) to insure trust property and the trustee; (17) to abandon or decline to administer property of insignificant value; (18) with respect to an interest in a proprietorship, partnership, LLC, or association, to continue or participate in its operation; (19) to establish and manage reserves; (20) to make loans to a beneficiary or to a third party; (21) to hold securities in book-entry form or in the name of a nominee; (22) to vote securities in person, by proxy, or by power of attorney; (23) to participate in reorganizations, consolidations, mergers, foreclosures, liquidations, and other corporate actions; (24) to pay taxes, assessments, and other expenses of administration; (25) to exercise elections under the Internal Revenue Code and comparable state law; (26) to select depositories, custodians, and agents.

The catalog is functional rather than doctrinal. It groups related transactional authorities and permits the trustee to consult a single provision for the powers relevant to ordinary administration. The present chapter treats the enumerated powers by functional group in the sections that follow, integrating each with the coordinate fiduciary duties developed throughout Volume II.

UTC § 816(1)–(3), (21) confers the trustee's ordinary acquisition and retention powers. The trustee may collect and receive trust property; may accept additions to the trust; may acquire an undivided interest in property in which the trustee holds an undivided interest in some other capacity; and may hold securities in book-entry form or in the name of a nominee. These powers permit the trustee to receive assets into the corpus at inception (Chapter 3 — Marshaling the Trust Estate) and throughout the administration.

Retention presents a specific fiduciary problem addressed by Matter of Janes, 90 N.Y.2d 41 (1997). A power to retain does not authorize retention of unsuitable assets. The trustee holding property inherited from the settlor must evaluate its suitability against the trust's purposes and the applicable investment standards under UPIA § 4. Suitable property may be retained; unsuitable property must be sold or otherwise repositioned. The retention power is a permission, not a mandate; its exercise is subject to the ordinary prudent-investor duty of review and, where appropriate, reallocation.

UTC § 816(5) confirms the trustee's power to sell trust property, at public or private sale, for cash or on credit, and on such terms as the trustee determines. Restatement (Second) of Trusts § 190; Restatement (Third) of Trusts § 86 cmt. b. The power extends to every asset in the corpus — real property, tangible personalty, securities, business interests, digital assets — and to sales for any legitimate administrative purpose: liquidation for distribution, reallocation of the portfolio, disposition of unsuitable property, funding of tax obligations, or reduction of concentration risk.

The sale power is disciplined by loyalty (no sale to the trustee or a related party without disclosure and consent — Chapter 7), by prudence (adequate marketing, informed pricing — Chapter 9), by impartiality (no sale timed or structured to favor one class of beneficiaries — Chapter 8), and by adherence to the terms of the trust (no sale of property whose retention the settlor has expressly required). The trustee should document, for material sales, the marketing effort, the pricing basis, the alternative bids or offers, and the fiduciary reasoning that supports the transaction.

UTC § 816(6), (10) confers coordinate powers to exchange property, to partition undivided interests, and to grant options concerning the disposition of trust property. These powers extend the sale authority to non-cash transactions. An exchange substitutes one asset for another without a market sale; a partition divides an undivided interest into severed portions; an option grants a counterparty the right to purchase on stated terms in the future.

Each of these transactions raises distinctive fiduciary problems. An exchange requires the trustee to value both sides of the transaction; a partition requires the trustee to evaluate the mechanics and equity of division; an option requires the trustee to price the optionality and to consider the effect of the encumbrance on the trust's flexibility. The prudent trustee treats each such transaction as a specific fiduciary exercise, documented and disclosed with the same care as an ordinary sale.

UTC § 816(7)–(8) confers the power to lease trust property, including power to grant a lease extending beyond the term of the trust. Restatement (Second) of Trusts §§ 191, 197. The lease power is essential to the administration of income-producing real property. It authorizes the trustee to negotiate terms, to grant renewal and purchase options, to accept escalation clauses and pass-throughs, and to make the ordinary commercial commitments that a lessor undertakes.

The power to lease beyond the term of the trust addresses a doctrinal problem specific to trusts: at common law, a lease exceeding the term of the trustee's authority was voidable at the succeeding trustee's or beneficiary's option. The statutory power removes this uncertainty for leases entered on prudent commercial terms. The fiduciary discipline remains: unusually long or concessional leases require the same evaluation and documentation as any other significant transaction, with attention to the trust's residual flexibility and the interests of successive beneficiaries.

UTC § 816(4) confers the trustee's power to invest and reinvest trust property, subject to the prudent-investor standard of UPIA § 2 and the coordinate duties of UPIA §§ 3 (diversification), 4 (duties at inception), 7 (cost sensitivity), and 9 (delegation). The investment power authorizes the trustee to acquire assets in any class or instrument — public equities, fixed income, alternatives, real property, private equity, hedge funds, commodities, and beyond — provided the investment satisfies the prudent-investor requirements in the context of the trust's purposes, beneficiaries, and other assets.

The prudent-investor standard operates at the portfolio level rather than at the individual-asset level. UPIA § 2(b). An investment appropriate in one context may be imprudent in another; the trustee's fiduciary evaluation is contextual and holistic. Chapter 9 (Prudent Administration) and Chapter 11 (Trustee Skills and the Standard of Care) treat the substantive doctrine; Chapter 12 (Delegation by Trustees) treats the delegation architecture through which most modern investment functions are exercised.

UTC § 816(12) confers the power to borrow money and to grant a security interest in trust property. The power is essential to a range of administrative purposes: bridging liquidity gaps pending sale of illiquid assets, financing repairs or improvements, acquiring property whose after-tax return exceeds the cost of the debt, and funding tax obligations arising on the death of the settlor. Guin v. Ha, 591 P.2d 1281 (Alaska 1979). The borrowing may be secured or unsecured; where secured, the trustee may mortgage or pledge trust property on such terms as prudence permits.

The borrowing exercise is fiduciary. The trustee must evaluate the interest rate, the term, the collateral, the effect on trust cash flow, and the alignment with trust purposes. Long-term encumbrances on core trust property require particular care and, where the stakes are large or the beneficiaries adverse, may warrant a petition for instructions under UTC § 201. The trustee ordinarily borrows in the fiduciary capacity, and the lender's recourse is limited to trust property under UTC § 1010 unless the trustee has assumed personal liability by contract.

UTC § 816(20) confers the power to make loans out of trust property, including loans to a beneficiary on terms and conditions the trustee determines to be fair. The power is subject to particular fiduciary constraints. Loans to non-beneficiary third parties are ordinary investments and are evaluated under the prudent-investor standard: creditworthiness of the borrower, adequacy of collateral, market interest rate, and portfolio fit. Loans to beneficiaries carry additional fiduciary concerns of impartiality (the loan effectively advances a distribution to that beneficiary and must be reconciled with the interests of the others) and, where the beneficiary is also a trustee, loyalty (Chapter 7 and UTC § 802).

The prudent lending practice includes documentation of the loan on ordinary commercial terms (promissory note, interest rate reflecting market conditions, collateral where appropriate, defined maturity, remedies on default), avoidance of concealed distributions dressed as loans, and periodic review of repayment performance. A loan to a beneficiary that is not collected in accordance with its terms becomes, in substance, an unequal distribution and must be addressed as such in the accounting to co-beneficiaries.

UTC § 816(11), (26) confers coordinate powers to deposit trust money in regulated financial institutions and to select depositories, custodians, and agents. These are the foundational administrative powers for the modern financial management of the trust. Deposits may be made in accounts of any customary type — checking, savings, money-market, certificates of deposit — subject to the ordinary duty of prudence in selecting the institution and monitoring its condition. Chapter 14 (Recordkeeping and Identification of Trust Property) treats the segregation and titling requirements that govern the account structure.

Custody arrangements for securities and other financial assets are governed by ordinary commercial practice, coordinated with the segregation and identification duties of UTC § 810 and Restatement (Third) of Trusts § 83. Book-entry holdings and nominee ownership (§ 816(21)) are expressly authorized, provided the trust's beneficial interest appears in the records of the custodian. Chapter 13 (Control and Protection of Trust Property) treats the coordinate protection duty; the present point is that the custody powers are broad and are commonly exercised through institutional arrangements with brokerages, banks, and trust departments.

UTC § 816(13), (18) confers the power to continue or participate in the operation of a business owned by the trust — sole proprietorship, partnership, LLC, or corporate — and to change its form. In re Estate of Cooper, 913 P.2d 393 (Wash. Ct. App. 1996). The power is essential to trusts that hold family businesses or founder-controlled enterprises; without it, the trustee would be required either to liquidate the business at inception or to obtain judicial authorization for every operational decision.

Business operation exposes the trustee to categories of liability that portfolio investment does not present: regulatory, employment, environmental, contractual, product-liability. The trustee should evaluate, at the outset and periodically thereafter, whether continued operation is consistent with the trust's purposes and beneficiary interests; whether the operation should be restructured through an entity that limits fiduciary exposure; whether professional management should be retained; and whether liability insurance should be procured. Chapter 12 (Delegation by Trustees) governs the delegation architecture; the fiduciary discipline of business operation is largely a discipline of prudent structural design.

UTC § 816(22) confers the power to vote securities in person, by general or limited proxy, or by power of attorney. The voting right is an ordinary incident of the equity position and requires no separate instrumental grant. The exercise is fiduciary: the trustee's vote must be informed, must consider the interests of the beneficiaries, and must adhere to the purposes of the trust. Where the trustee holds a substantial concentrated equity position, the deliberative burden is proportionately greater; where the position is a passive minority interest, the burden is proportionately lighter.

Institutional trustees frequently delegate the mechanical exercise of voting rights to specialized proxy-advisory or index-voting programs, subject to periodic review of the program's alignment with the trust's interests. Delegation of voting is governed by UTC § 807 and the ordinary delegation architecture (Chapter 12). The trustee retains responsibility for the framework within which voting occurs, even where individual votes are cast by a delegated program.

UTC § 816(23) confers the power to participate in reorganizations, consolidations, mergers, dissolutions, liquidations, foreclosures, and analogous corporate actions. The trustee may accept a stock-for-stock exchange, participate in a cash tender, exercise appraisal or dissenter rights, consent to a reorganization plan, receive distributions in cash or in kind, or take any other action available to an equity holder. Each corresponds to a fiduciary judgment specific to the transaction: whether the exchange ratio is fair, whether the tender price is optimal, whether appraisal offers a superior alternative, whether the reorganization aligns with trust purposes.

These powers reflect the trustee's status as a full participant in the ordinary commerce of the securities markets. They do not require special drafting and are exercisable in the ordinary course. The prudent trustee maintains, for material corporate actions, a deliberative record showing the material facts considered, the professional advice obtained, the beneficiary interests weighed, and the reasoning that supports the decision. This is the ordinary discipline of every discretionary fiduciary act, developed in doctrinal depth in Chapter 18.

Closely held business interests present distinctive administrative problems. The trustee's fiduciary role in a closely held enterprise typically extends beyond passive shareholder rights to active participation in governance: nominating or serving as director, approving budgets and capital expenditures, evaluating executive compensation, and considering strategic transactions. Where the trustee holds a controlling interest, the position may confer effective control of the enterprise, and the trustee must administer that control fiduciarily.

The recurring problems include: valuation for accounting and distribution purposes; diversification concerns under UPIA § 3 where concentration in a single enterprise is significant; management succession when the trustee's own tenure is temporary; conflicts arising where a beneficiary is also involved in the enterprise; and coordination with the settlor's expressed or inferred wishes concerning the enterprise. Where the instrument authorizes retention of the business and provides a clear framework for its governance, the trustee's task is largely one of faithful execution. Where the instrument is silent or ambiguous, the trustee should consider a petition for instructions on major questions, particularly disposition and succession.

UTC § 816(7)–(9) confers comprehensive real property management powers: to make ordinary and extraordinary repairs; to demolish improvements no longer serving trust purposes; to erect new improvements; to raze existing improvements; to develop or subdivide; to grant and receive easements; to enter leases (including long-term); to explore, drill, and take related actions on mineral, gas, and oil interests; and generally to exercise all rights of a private owner of real property. Chapter 13 (Control and Protection of Trust Property) treats the coordinate custody dimension.

The exercise is disciplined by the coordinate duties. Capital improvements are typically allocated to principal under the Uniform Principal and Income Act; ordinary repairs are typically allocated to income. Environmental exposure requires attention to CERCLA and analogous state statutes; the trustee should evaluate environmental risk at acquisition, monitor conditions during ownership, and consider environmental audits before major decisions. Insurance appropriate to the property is a fiduciary requirement; underinsured property is a preservation failure.

UTC § 816(16) confers the power to insure trust property against damage, loss, and liability, and to insure the trustee against liability arising from the administration of the trust. Restatement (Third) of Trusts § 86 cmt. h. Insurance is a core preservation function (Chapter 13) and is not optional in the ordinary case. A trustee who leaves valuable trust property uninsured against foreseeable risks has committed a preservation failure independent of any subsequent loss.

The scope and structure of the insurance program are fiduciary judgments. The trustee evaluates the property inventory, the applicable perils, the available coverage, the deductible structure, the premium cost, and the creditworthiness of the insurer. Trustee liability insurance — fiduciary liability policies — protects the trustee against certain claims arising from administrative decisions and is commonly funded from the trust as a cost of administration. The prudent trustee maintains a documented insurance program subject to periodic review and updates the program as the trust's asset composition or risk exposure changes.

UTC § 816(24) confers the power to pay taxes, assessments, and other expenses incurred in the collection, care, administration, and protection of the trust. Restatement (Second) of Trusts § 194. The power is fundamental to administration: without it, the trustee could not discharge the trust's obligations to taxing authorities, service providers, and counterparties. The exercise is disciplined by the ordinary duty of prudence (verification of assessments, contest of erroneous claims, timely payment to avoid penalty) and by the principal-and-income rules that allocate categories of expense between the two accounts.

The power to abandon or decline property of insignificant value (§ 816(17)) is a coordinate protective power. A trustee is not required to expend fiduciary resources maintaining a de minimis asset whose administrative cost exceeds its value; the statute permits reasoned abandonment or disclaimer in such circumstances, subject to the ordinary documentation and disclosure requirements. The judgment is fiduciary: it must be informed, must consider the interests of the beneficiaries, and must be memorialized in a form that supports the ordinary reporting under Chapter 17.

UTC § 816(25) confers the power to exercise elections under the Internal Revenue Code and comparable state law. The tax-elections power is one of the most consequential in modern trust administration. Elections available to the trust include: the ITB § 645 election to treat a revocable trust as part of the estate; the § 663(b) 65-day rule for distributions treated as made in the prior year; the § 2032 alternate valuation election; QTIP and reverse-QTIP elections under §§ 2056(b)(7), 2652(a)(3); GST allocations and reverse allocations; S-corporation elections including QSST and ESBT; portability elections under § 2010(c); and many others specific to particular asset classes or transactions.

The exercise is fiduciary and consequential. A trustee who fails to make a beneficial election, or who makes an election adverse to the beneficiaries' interests, may be surcharged for the tax cost. The prudent trustee coordinates with qualified tax counsel or an accounting professional at each material tax reporting date, evaluates the available elections against the interests of current and remainder beneficiaries (an impartiality question — Chapter 8), documents the analysis, and where the stakes are large and the elections irrevocable, considers a petition for instructions or beneficiary consent under UTC §§ 201, 411.

UTC § 816(14) confers the power to institute, maintain, or defend an action, claim, or judicial proceeding for the protection of trust property or of the trustee in the performance of the trustee's duties. Chapter 15 (Enforcement and Defense of Claims) treats the doctrinal architecture in depth; the powers dimension is that the trustee possesses full authority, without court approval in the ordinary case, to pursue claims belonging to the trust and to defend claims asserted against the trust.

The litigation power is exercised as a fiduciary. The trustee must evaluate the merits, the recovery, the cost, the effect on the trust, and the interests of the beneficiaries. Meritless litigation is a fiduciary failure independent of its outcome; meritorious litigation abandoned for want of resolve is likewise a fiduciary failure. The trustee ordinarily engages counsel, defines the litigation strategy in consultation with counsel, and periodically evaluates continued prosecution against emerging developments. Litigation costs and recoveries are administrative and are ordinarily accounted through the standard reporting under Chapter 17.

UTC § 816(17) confers the power to resolve a dispute concerning the interpretation of the trust or its administration by mediation, arbitration, or other procedure for alternative dispute resolution; and by extension the power to settle and compromise claims. Restatement (Second) of Trusts § 195; Restatement (Third) of Trusts § 86 cmt. d. The compromise authority extends to affirmative claims held by the trust, to claims asserted against the trust, and to intra-fiduciary and beneficiary disputes over interpretation.

The exercise is fiduciary. Compromise reached without adequate evaluation of merits, recovery, and cost is defective even where the substantive terms fall within the range of reasonable outcomes. Where the stakes are large or the interests of beneficiaries are adverse or unascertained, the trustee may petition the court for approval to convert an exposed exercise into a protected one. Non-judicial settlement agreements under UTC § 111, where authorized by state law, supply an alternative structured mechanism for resolving interpretive disputes without formal proceedings.

The ADR authority in § 816(17) permits the trustee to submit disputes to mediation, arbitration, or other alternative processes. Arbitration is available for disputes between the trustee and third parties (contract, tort, commercial disputes) and, where authorized by the terms of the trust and applicable law, for disputes between the trustee and beneficiaries. Mandatory arbitration provisions in trust instruments have received varied treatment in state courts; the trustee should consult applicable law before invoking such a provision, particularly where the interests of unascertained or unrepresented beneficiaries are implicated.

The choice between litigation and ADR is itself a fiduciary judgment. Mediation is ordinarily appropriate where the parties share an interest in preserving relationships and where the underlying dispute is susceptible to negotiated resolution. Arbitration is ordinarily appropriate where confidentiality, expertise of the decisionmaker, or expedited resolution supplies material advantage. Litigation is ordinarily appropriate where the underlying issue is precedential, where discovery is required, or where the availability of appeal or judicial oversight is material. The prudent trustee documents the reasoning that supports the forum selection.

The specific powers over real property — sale, exchange, lease, mortgage, improvement, demolition, subdivision, easements, mineral development — collectively confer full owner-equivalent authority over real property held by the trust. Section 19.11 (Chapter 19) and the earlier sections of the present chapter treat the individual authorities; the point here is that they operate coordinately. A trustee administering trust real property proceeds as any prudent owner would proceed: informing itself of the property, maintaining insurance and repairs, evaluating and executing productive uses, and disposing of property when its retention no longer serves the trust.

The specific powers do not enlarge the trustee's authority beyond the fiduciary framework. A sale on unfavorable terms is voidable for imprudence even where the sale power is unqualified; a lease at below-market rent to a relative is voidable for loyalty violation even where the lease power is unqualified; a development plan inconsistent with the settlor's expressed preservation intent is voidable for departure from trust purposes. The catalog empowers ordinary administration; the fiduciary duties govern its content.

The specific powers over personalty operate through the ordinary catalog: acquisition, retention, sale, exchange, and distribution. UTC § 816(1)–(5), (21)–(24). Ordinary personalty — household furnishings, vehicles, tools — is administered through routine transactional powers. Specialized personalty — art, antiques, coins, jewelry, firearms, wine, collectibles — requires specialized custody, insurance, and expertise in valuation and disposition.

The distribution of tangible personal property is the recurring practice problem. Multiple beneficiaries with overlapping preferences, items of substantial sentimental but modest monetary value, and items whose distribution is directed by a separate written statement under UPC § 2-513 present distinctive challenges. The trustee's power to distribute in kind (UTC § 816(21)) supplies the mechanism; the duties of impartiality and information govern the process. A trustee facing a contested distribution should ordinarily obtain a professional appraisal, offer a reasoned distribution scheme, and where necessary invoke a randomized selection procedure or seek judicial approval.

The specific powers over financial assets operate through the ordinary catalog: deposit and custody (§ 816(11), (26)), investment (§ 816(4)), sale and exchange (§ 816(5)–(6)), holding in book-entry or nominee form (§ 816(21)), voting and corporate actions (§ 816(22)–(23)), and distribution (§ 816(24)). The trustee opens and maintains accounts in the trust's name, executes trades and transfers, participates in dividend and interest distributions, votes and grants proxies, and generally administers the portfolio as any prudent owner would.

Modern financial administration relies extensively on institutional custody and delegated investment management. The trustee's fiduciary exercise consists in the selection of the custodian and investment manager, the definition of the investment policy statement, the specification of the fee arrangement, and the periodic review of performance and compliance. UPIA §§ 2, 7, 9 supply the substantive standards; UTC § 807 and Chapter 12 supply the delegation architecture; UTC § 816 supplies the transactional authority.

The Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA), adopted in nearly every jurisdiction, supplies specific statutory authority for the trustee's access to and administration of digital assets: email accounts, social media accounts, cryptocurrency wallets, domain names, cloud storage, digital media libraries, and online business assets. The Act establishes a priority hierarchy for fiduciary access — online tools, testamentary instruments, and terms-of-service agreements — and coordinates the trustee's fiduciary authority with the custodian's compliance obligations.

Digital-asset administration requires attention to three recurring problems noted in Chapter 19. First, custodial cooperation: online providers require documented fiduciary authority before granting access. Second, cryptographic control: the trustee must obtain and secure private keys, seed phrases, and multi-factor devices necessary to control cryptocurrency and analogous assets, and must maintain custody arrangements that survive the trustee's own death or incapacity. Third, valuation and disposition: many digital assets present specialized valuation and market problems. The specific statutory grant supplies the authority; the operational execution requires specialized competence and, ordinarily, specialized professional support.

UTC § 816(21)–(22) confers the trustee's ordinary distribution powers: to distribute in cash or in kind, in divided or undivided interests, to allocate items of income and principal, and to make distributions to persons under legal disability through custodians and guardianships. Chapter 18 (Discretionary Powers and Fiduciary Judgment) treats the discretionary dimension; Chapter 8 (Impartiality) and Chapter 17 (Duty to Inform and Report) treat the coordinate impartiality and accounting duties.

Distribution is the fiduciary act by which beneficial interests become possessory. The exercise is disciplined by loyalty (no diversion), by impartiality (allocation consistent with the settlor's design), and by prudence (appropriate valuation and timing). Improper distributions are voidable and support surcharge and restitution remedies; proper distributions, documented with authority and calculation, discharge the trustee's obligation and reduce the corpus accordingly. Chapter 15 (Enforcement and Defense of Claims) treats the mechanisms by which improper distributions to third parties are recovered.

UTC § 417 authorizes the trustee to divide a trust into two or more separate trusts, or to consolidate two or more trusts into a single trust, where the division or consolidation does not impair the rights of any beneficiary or adversely affect the achievement of the purposes of the trust. The power supports several administrative objectives: separate accounting for beneficiaries of different generations; efficient management of assets requiring different investment approaches; GST exemption allocation and preservation; and administrative economy where multiple small trusts share a common design.

Division and consolidation are fiduciary acts subject to the ordinary duties. The trustee must document the analysis showing the absence of beneficiary prejudice, the alignment with trust purposes, and the coordinated tax treatment (particularly GST implications). Notice to qualified beneficiaries under UTC § 813 is customary and, in some jurisdictions, mandatory. Where the analysis is contested or the trustee is uncertain, a petition for instructions or a non-judicial settlement agreement supplies additional protection.

The termination powers close the administrative arc. Upon the occurrence of a terminating event — expiration of the term, exhaustion of the purposes, distribution of the corpus, or a court order — the trustee winds up the administration under UTC §§ 816(21), 817. Winding up encompasses the ordinary acts: satisfying remaining obligations; making final distributions; preparing final accountings; obtaining beneficiary receipts and releases; filing final tax returns; and terminating administrative arrangements (accounts, custody, insurance, contracts).

The trustee's fiduciary role continues throughout winding up. UTC § 817. The trustee retains authority to complete the final tasks, to defend the final accounting against objection, and to bring the administration to an orderly close. Discharge from further liability follows the acceptance of the final accounting, whether informally by beneficiary receipts and releases or formally by court order. Chapter 17 (Duty to Inform and Report) treats the accounting architecture in depth; the present point is that the specific termination powers are exercised as ordinary fiduciary powers, with the same discipline and documentation as any other exercise.

Every specific power in the § 816 catalog is exercised within the fiduciary framework developed throughout Volume II: good faith (Chapter 6), loyalty (Chapter 7), impartiality (Chapter 8), prudent administration (Chapter 9), standard of care (Chapter 11), delegation discipline (Chapter 12), protection and preservation (Chapter 13), recordkeeping (Chapter 14), enforcement and defense (Chapter 15), collection (Chapter 16), disclosure (Chapter 17), and the discretion doctrine (Chapter 18). No enumerated power is exercised in isolation from the framework; each is exercised within it.

This is the doctrinal completion of Volume II. Chapters 1–5 established the commencement of the trustee's office; Chapters 6–10 developed the core fiduciary duties; Chapters 11–14 developed the operational duties of administration; Chapters 15–17 developed the enforcement, collection, and disclosure architecture; Chapter 18 addressed the doctrine of discretion; Chapter 19 stated the general grant of powers; and the present chapter enumerates the specific powers through which the general grant is ordinarily exercised. The office of the trustee, as a matter of statutory authority and fiduciary duty, is now complete in its articulation.

Judicial review of the exercise of specific powers proceeds under the standards developed for general powers (Chapter 19) and for discretion (Chapter 18). The review is process-based: the question is not whether the court would have exercised the power as the trustee did, but whether the trustee's exercise falls within the range of reasoned fiduciary judgment. Estate of Rothko, 43 N.Y.2d 305 (1977). A trustee whose record demonstrates deliberation, information, adherence to trust purposes, and consideration of beneficiary interests enjoys the presumption of regularity; a trustee whose record does not disclose these elements bears the burden of establishing propriety.

Abuse of statutory power supports the ordinary fiduciary remedies of UTC §§ 1001–1002: compelling exercise or non-exercise; enjoining threatened breach; surcharging for losses; ordering restitution of profits; removing the trustee; reducing or denying compensation; voiding transactions; and granting such other relief as the equities require. The remedies operate cumulatively; a single course of abuse may support several in combination. The catalog of statutory powers thus operates within a mature remedial architecture that Volume III will develop in doctrinal depth.

Several misconceptions recur concerning trustee powers and merit direct correction at the close of Volume II. First, the specific catalog does not exhaust the trustee's authority. UTC § 816 opens 'without limiting the authority conferred by Section 815,' and the general grant of § 815(a)(2)(B) supplies unlisted powers appropriate to proper administration. Second, statutory powers do not authorize departure from the terms of the trust. The statute is the default; the instrument controls where it speaks. Third, ownership-equivalent authority is not private ownership. The trustee holds the powers of an owner as fiduciary — for the trust — and never for private benefit.

Fourth, third-party protection under UTC §§ 1012–1013 protects the counterparty, not the trustee. The improper exercise of a specific power is voidable as between the trustee and the beneficiaries even where the transaction stands against the counterparty. Fifth, delegation of a power to a professional does not shift fiduciary responsibility for its selection, instruction, and supervision (Chapter 12). Sixth, availability of court approval is not a substitute for fiduciary judgment. Petitions for instructions are reserved for genuinely contested exercises; ordinary powers are exercised on the trustee's own responsibility. Seventh, comprehensive statutory authority does not enlarge the range of defensible outcomes beyond what a reasoned fiduciary would reach; it enlarges the range of transactions the trustee may execute. Eighth, and most importantly, the availability of a power is not an occasion for its exercise. Every enumerated authority is fiduciary; each exercise must serve the trust, the beneficiaries, and the settlor's purposes, or it should not occur at all.

The operational discipline of specific powers integrates the general-powers protocol of Chapter 19 with the enumerated authorities of § 816. For each significant exercise, the trustee: (1) identifies the specific enumerated power (or, where none is enumerated, the general grant of § 815(a)(2)(B)); (2) verifies that the terms of the trust do not restrict or condition the power; (3) confirms the alignment of the contemplated transaction with the purposes of the trust and the interests of the beneficiaries; (4) informs itself of the material facts and obtains professional analysis where appropriate; (5) considers the coordinate fiduciary duties — loyalty, impartiality, prudence, standard of care, good faith — and confirms that each is satisfied; (6) executes the transaction in a form that discloses the fiduciary capacity and preserves the trust's remedies; (7) memorializes the deliberation and reasoning in a contemporaneous record; and (8) accounts for the transaction in the ordinary reporting to beneficiaries under Chapter 17.

The protocol is not bureaucracy; it is the operational expression of the statutory catalog and its fiduciary framework. Its faithful maintenance discharges the specific-powers doctrine in ordinary administration, produces the record on which challenges are defended, and integrates the transactional authority conferred by § 816 with the fiduciary discipline developed throughout Volume II. It is the pattern by which every prudent trustee administers.

Volume II opened with the doctrinal moment at which the trustee's office begins (Chapter 1) and traced its full development through commencement, marshaling, co-trustees, succession, and the core fiduciary duties of good faith, loyalty, impartiality, prudence, and standard of care. It then developed the operational duties of administration — delegation, protection, recordkeeping, enforcement, collection, disclosure — and closed with the doctrines of discretion and of general and specific powers. The office of the trustee, as a matter of statutory authority and fiduciary duty, is now complete in its articulation. Every duty is stated; every power is enumerated; every constraint is identified.

What remains is the doctrine of consequences. What follows when a trustee breaches a duty or exceeds a power? By what mechanisms are the fiduciary standards enforced? What remedies restore the trust and its beneficiaries? What limits govern the trustee's exposure? What defenses attenuate liability? These questions constitute the subject of Volume III — Fiduciary Liability, Remedies, and the Enforcement of the Trust. Volume II has established the fiduciary standard; Volume III will address the enforcement architecture that makes the standard effective. The reader who has completed Volume II is now positioned to enter Volume III with the full doctrinal foundation the enforcement inquiry requires.

• Uniform Trust Code § 816 (2000) (specific powers of trustee).
• Uniform Trust Code § 815 (2000) (general powers of trustee).
• Restatement (Third) of Trusts §§ 85, 86 (general and specific powers).
• Restatement (Second) of Trusts §§ 186, 190–197, 227 (powers and their exercise).
• Uniform Prudent Investor Act §§ 2, 3, 4, 7, 9 (investment authority and standards).
• Estate of Rothko, 43 N.Y.2d 305 (1977) (abuse of specific powers; self-dealing).
• Matter of Janes, 90 N.Y.2d 41 (1997) (retention power and prudence).
• Estate of Baldwin, 442 A.2d 529 (Me. 1982) (scope of sale power).
• First Ala. Bank v. Spragins, 515 So. 2d 962 (Ala. 1987) (investment power and its limits).
• Wood v. U.S. Bank, N.A., 160 Ohio App. 3d 831 (2005) (extended powers).
• In re Estate of Cooper, 913 P.2d 393 (Wash. Ct. App. 1996) (business-operation power).
• Guin v. Ha, 591 P.2d 1281 (Alaska 1979) (borrowing and mortgaging).

• Austin Wakeman Scott, William Franklin Fratcher & Mark L. Ascher, Scott and Ascher on Trusts (5th ed.) §§ 17.1–17.15, 18.1–18.10, 19.1–19.6.
• George Gleason Bogert, George Taylor Bogert & Amy Morris Hess, The Law of Trusts and Trustees (3d ed. & Supp.) §§ 551–570, 741–812.
• Charles E. Rounds Jr. & Charles E. Rounds III, Loring and Rounds: A Trustee's Handbook (current ed.), ch. 3, §§ 3.1–3.6.
• Robert H. Sitkoff & Jesse Dukeminier, Wills, Trusts, and Estates (11th ed.), ch. 9.
• John H. Langbein, The Uniform Trust Code: Codification of the Law of Trusts in the United States, 15 Trust L. Int'l 66 (2001).
• John H. Langbein, The Contractarian Basis of the Law of Trusts, 105 Yale L.J. 625 (1995).
• Restatement (Third) of Trusts, Reporter's Notes to §§ 85, 86.
• American College of Trust and Estate Counsel, ACTEC Commentaries (current ed.).
• Uniform Law Commission, Uniform Trust Code Comments to §§ 815–816.