Duties include loyalty, prudence, impartiality, and the obligation to inform and report. Breach supports surcharge, removal, denial of compensation, and in some cases punitive damages.
Exculpatory clauses may limit liability for ordinary negligence.
Alternative Names:
Trustee Breach|Fiduciary Breach (Trust)
Why it Matters?
Exculpatory clauses limit liability for negligence but cannot excuse bad faith or reckless indifference, which means characterizing conduct as an investment judgment rather than a loyalty breach determines whether the clause applies. The Uniform Trust Code also invalidates exculpatory clauses inserted by the trustee absent fair disclosure. Beneficiary consent and ratification are separate defenses requiring full disclosure to be effective.
Frequently Confused with
Related terms
Frequently asked questions
What do exculpatory clauses not excuse?
What limits trustee-drafted clauses?
