Absent some provision in the trust agreement absolving you from personal responsibility for bad investments, you will be personally liable for any investment decisions which do not meet the "prudent person" standard (or its equivalent in your jurisdiction). Personally, I simply cannot imagine why you would want to invest on margin as a Trustee. You're taking on mega risk for a reward for people other than yourself. Please retain an experienced attorney with whom you can discuss this matter further. Good luck to you.
This information is presented as a public service. It should not be construed to be formal legal advice nor considered to be the formation of a lawyer/client relationship. I am licensed in Connecticut and New York and my answers are based upon the law in those jurisdictions. My answer to any specific question would likely be different if I were to review a client's file and have the opportunity to interview the client. Accordingly, I strongly urge you to retain an attorney in your jurisdiction with respect to any legal matter.
You as trustee would be liable for your actions. If this is revocable trust with your assets in it then liability for fidicuary actions as trustee not a significant issue , butif irrevocable trust you are asking for trouble.
My colleaughes answers presume you are the trustee of the trust account but you do say......are you the grantor or the trustee? I would tend to concur but justnwant to be sure? If you are then my colleagues answers are spot-on. The responsibility of a trustee to diversify the portfolio does NOT include using leverage as thisnis not a prudent approach and is risky thereby exposing you to a breach of your fiduciary duties......unless trust agreement overrides the basic tenet by expressly allowing margin, as well as an express purpose clause including margin as an appropriate investment
strategy as the grantor can so stipulate.....although I have never seen this. Personally I think some leverage in a portfolio could be useful depending on the asset mix and need to diversify.....but it has to be constrained.
My answer is not intended to be giving legal advice and this topic can be a complex area where the advice of a licensed attorney in your State should be obtained.