Trustee's Liability

Question 1

Trustee’s Liability

Trustee’s Misconduct

Answer 1

Personally liable for losses due to breach of duty. Beneficiary may seek court removal of trustee for good cause.

Question 2

Trustee’s Liability

Co-Trustee’s Misconduct

Answer 2

Personally liable for losses due to Co-Trustee’s breach of duty if trustee participated, improperly delegated, approved, concealed, negligently enabled, or failed to take reasonable steps to compel redress.

Question 3

Trustee’s Liability;

Predecessor Trustee’s Misconduct

Answer 3

Successor Trustee is personally liable for lossess due to predecessor breach of duty if trustee knew or should have known and allowed breach to continue or failed to take reasonable steps to redress.

Question 4

Trustee’s Liability

Exculpatory Clause

Answer 4

Trustee not personally liable without willful neglect. It still liable for breach of duty in bad faith or with reckless indifference.

Question 5

Remedies for Breach of Trust

If a trustee breaches their fiduciary duties, beneficiaries can seek:

Answer 5

1. Damages-Compensatory damages for any loss to the trust.
2. Removal of the Trustee-Courts can remove a trustee for serious misconduct or breach of trust.
3. Restoration-Trustee may be required to restore misappropriated or mismanaged trust assets.