pjc-family-2024-lib

E XPRESS T RUSTS

PJC 235.10

PJC 235.10 Breach of Duty by Trustee—Self-Dealing—Duties Not Modified or Eliminated by Trust QUESTION ______ Did TRUSTEE comply with his fiduciary duty to BENEFICIARY in connec tion with [ describe self-dealing transaction ]? TRUSTEE owed BENEFICIARY a fiduciary duty. To prove he complied with this duty in connection with [ describe self-dealing transaction ], TRUSTEE must show that, at the time of the transaction in question— [Use only the items that are relevant in the particular case.] 1. the transaction in question was fair and equitable to BENEFI CIARY ; [ and ] 2. TRUSTEE made reasonable use of the confidence placed in him by SETTLOR ; [ and ] 3. TRUSTEE acted in good faith and in accordance with the purposes of the trust in connection with the transaction in question; [ and ] 4. TRUSTEE placed the interests of BENEFICIARY before his own and did not use the advantage of his position to gain any benefit for himself at the expense of BENEFICIARY ; [ and ] 5. TRUSTEE fully and fairly disclosed to BENEFICIARY all material facts known to TRUSTEE concerning the transaction in question that might affect BENEFICIARY ’s rights. “Good faith” means an action that is prompted by honesty of intention and a reasonable belief that the action was probably correct. Answer “Yes” or “No.” Answer: _______________ COMMENT When to use. The foregoing question should be submitted when the trustee is accused of self-dealing and the duties of loyalty and full disclosure have been neither modified nor eliminated by the trust instrument or by statute ( see, e.g. , Tex. Prop. Code §§113.056–.057). If there is no evidence rebutting the presumption of unfair ness that arises when a fiduciary profits or benefits in any way from a transaction with

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