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Measure of Damages for Breach of Trust

If a Court finds that a trustee has committed a breach of trust, what are the consequences? When it is a serious breach of trust, the Court can remove the trustee. If damages are being requested in light of the breach, Section 456.10-1002, RSMo spells out the measure of damages.

In short, a trustee who commits a breach of trust is liable to the beneficiaries affected for the greater of: (1) the amount required to restore the value of the trust property and trust distributions to what they would have been had the breach not occurred, or (2) the profit the trustee made by reason of the trust. Note that the statute calls for the damages to be equivalent to the higher of the two figures; therefore, the Court must calculate the damages under each approach. Under Section 456.10-1003, RSMo, moreover, a trustee is accountable to all affected beneficiaries for any profit made by the trustee arising from the administration of the trust.

When there is more than one trustee liable to the beneficiaries for a breach of trust, a trustee is entitled to a contribution from the other trustee(s) that is/are also liable. This set-off does not apply, however, if a particular trustee acted recklessly, in bad faith, or was substantially more at fault.

Contact with questions pertaining to trustees, beneficiaries, or trusts generally.