Which duty requires the trustee to balance the interests of income and remainder beneficiaries?

The duty that requires the trustee to balance the interests of income and remainder beneficiaries is the duty of impartiality. This duty mandates that a trustee must act fairly and equitably toward both parties. In trusts where there are both income beneficiaries (those entitled to the income generated by the trust assets, such as dividends or interest) and remainder beneficiaries (those entitled to the principal of the trust once the income beneficiaries’ interests have ended), the trustee is responsible for ensuring that the interests of both groups are considered and appropriately addressed.

This means that the trustee cannot favor one group over the other. The duty of impartiality ensures that the trustee makes decisions that reflect the needs and rights of both income and remainder beneficiaries, promoting a balanced approach to trust management. For example, if the trustee were to excessively favor income beneficiaries at the expense of remainder beneficiaries, it could deplete the trust assets and ultimately disadvantage those who are to benefit in the future. Thus, fulfilling the duty of impartiality is essential for maintaining the trust's integrity and upholding the beneficiaries' rights.