(b) That's wrong. When acting as a trustee, the trustee becomes personally liable for any transactions entered into with third parties.

For example, if a trustee enters into a contract involving trust assets (eg to buy or sell or lease property) the terms of such contracts can be enforced against them personally. This is because, in law, the trust has no separate existence and cannot itself acquire legal rights and duties. When dealing with third parties, a trustee does not act as an agent or employee, either of the trust or of the beneficiaries, but as a principal party.

Although debts and other liabilities undertaken by a trustee can be enforced against the trustee personally, the trustee is entitled to be indemnified from the trust assets for such expenses and liabilities, as long as they are properly incurred. If these assets are insufficient, the beneficiaries are individually liable to reimburse the trustee from their own assets.