Trustee's Liabilities Flashcards
What is the trustee liable for and when, under the beneficiaries’ right of enforcement?
What remedies can the beneficiary seek for?
The following are the trustee’s responsibility:
-> lost profits
-> interest
AND
-> other losses
RESULTING from a breach of trust.
Beneficiaries may sue the trustee and seek damages or removal of the trustee for breach.
What other things are trustee’s liable for?
Trustee’s are liable for the other following things
-> co-trustees are jointly liable
-> the trustee is liable for a predecessor’s breach if he knew of it AND failed to address it or was negligent in delivering property
-> generally, the trustee is liable for an agent’s breach if the trustee directs or conceals the agent’s act or fails to exercise reasonable supervision over the agent
When is the trust personally liable to third parties?
Can he be indemnified by the trust?
The trustee is personally liable on contracts entered into and for tortious acts committed while acting as trustee.
Trustee can seek indemnity from the trust IF the trustee was acting within the scope of the trustee’s duties.
When can a beneficiary or successor trustee set aside a transaction where the trust’s property was transferred?
When property is improperly transferred as a result of a breach of trust to a third party who is not a bona fide purchaser, a beneficiary or successor trustee may have the transaction set aside.
