Conflicts arise from personal financial interests, service as fiduciary for competing interests, business relationships with trust counterparties, and dual roles as trustee and beneficiary.
Disclosure and consent may permit continued service.
Alternative Names:
Fiduciary Conflict|Divided Loyalty
Why it Matters?
Trustee-beneficiary dual roles create structural conflict that trust instruments frequently create deliberately, and the resulting tension between the trustee's interest in distributions and the remainder beneficiaries' interest in preservation generates recurring litigation. Ascertainable standards limiting discretion to health, education, maintenance, and support constrain the conflict and are the drafting response. Independent co-trustees are the alternative.
Frequently Confused with
Related terms
Frequently asked questions
What structural conflict do trusts create?
What constrains the conflict?
