The powers of a trustee may be derived from three different sources:
- Those expressly granted in the governing instrument
- Those determined by a court to be implied or inferred powers
- Those granted by statute
A number of states have adopted the "Uniform Trustees' Powers Act" which gives a trustee a powers to take many actions, at the trustee's discretion. The Act also provides standards to guide the trustee and that a trustee is to have such other powers as may be reasonably implied from the trust purposes.
In some other states where the Uniform Act has been adopted, extensive administrative powers are granted to trustees by statute unless the settlors expressly provided otherwise. In other states, statutes list powers which are deemed incorporated in every trust instrument unless the settlor has provided otherwise. In a few states the settlor must specifically incorporate one or more of the listed powers by reference in the trust instrument if the statutory powers are to be used.
These statutes vary considerably in detail, but can be classified as those which grant more or less comprehensive powers than the Uniform Act, and those which permit the settlor or testator to incorporate one or more of the listed powers.
Statutes may also contain restrictions and may deny a trustee one or more powers which the legislature believes to be detrimental to good trust administration. Restrictions may also be found in several federal statutes.