Self-Dealing Trustees Quote

 

 

A trustee has a duty of loyalty to the beneficiaries of a trust. Farley v. Farley, 19 Utah 2d 301, 308, 431 P.2d 133, 137-38 (1967); Restatement (Second) of Trusts § 170 (1959); IIA Scott, Trusts § 170 (4th ed. 1987). See also In re Campbell's Estate, 53 Utah 487, 504, 173 P. 688, 694 (1918). A trustee's duty of loyalty requires the trustee to administer the trust “solely in the interest of the beneficiary.” Restatement (Second) of Trusts § 170 (1959). IIA Scott, Trusts § 170, at 312 (4th ed. 1987). As such, a trustee is not permitted to engage in self-dealing, or “to place himself in a position where it would be for his own benefit to violate his duty to the beneficiaries.” IIA Scott, Trusts § 170, at 311. The prohibition against self-dealing does not depend upon proof of bad faith, but is absolute so as to avoid the possibility of fraud and the temptation of self-interest. Id. at 312.