Fiduciary duties general Flashcards
Fiduciary duties
Trustee: the law mainly addresses
the trustees duties to the beneficiary
Fiduciary duties
Beneficiary: the law mainly addresses the
beneficiaries (and the beneficiaries creditors) rights to the trust assets
Fiduciary duties
The trustees duty to the beneficiary is a
fiduciary one
The trustees duty to the beneficiary is a fiduciary one
Meaning
that the trustee must always act in dealing with the trust assets, in the interests of the beneficiaries, and the trust, and never in the trustees own interst.
Fiduciary duties
consists of a series of rules that govern the trustees interaction with the beneficiaries and the trust:
(5)
- the duty of obediance to the settlors intent
- the duty of loyalty to the beneficiaries
- the duty of prudance
- the duty of impartiality, AND
- the duty to inform and report
A trustee who is found to have breached one or more fiduciary duties
may be removed from office for cause
and
the beneficiaries will be entitled to restitution
Fiduciary duties
standard of care
high standard of care (‘utmost care’)
Fiduciary duties
must always act in
good faith and in the best interests of the trust and the beneficiaries
UTC 801 Duty to adminster trust
The trust shall administer in
- good faith,
- in accordance with its terms
- and purpose
- and the interests of the beneficiaries
- with this code
Breach through negligence
- liable for mere negligence
- mere acts and ommisions constitutue negligence
- waht the beneficiary can sue for
Remedies for breach of trust
- Removal of trustee
- Disgorgement - trustee has to return all the gain she recieved from transaction
- Comensatory damages
- recover lost income, capital gain, or appreciation
- compel distributions if the trustee unreasonably withheld assets from beneficiary
Remedies
The beneficiary always has standing to sue the trusteee to
remedy a breach of trust affecting trust property that could be distributed to the beneficiary
