Which duty requires a trustee to keep separate personal property from trust property?

• A. Duty of loyalty
• B. Duty to disclose conflicts
• C. Duty to separate personal and trust property
• D. Duty of impartiality

Answer: (C)

The concept being tested is that a trustee must keep trust property distinct from the trustee’s own property. This “separation” duty prevents commingling of assets, ensures clear title and accountability, and protects the beneficiaries by making it impossible for the trustee to use trust assets for personal purposes or to blur lines between personal liabilities and trust obligations. In practice, it means keeping trust funds in separate accounts, maintaining clear records, and not mixing personal funds with trust funds.

Other duties described address different aspects of fiduciary behavior—avoiding self-dealing and conflicts of interest (duty of loyalty), disclosing conflicts (duty to disclose conflicts), and treating beneficiaries fairly (duty of impartiality). None of these specifically require separating personal and trust property, which is why the separation duty is the best fit for this question.