Exculpatory Clauses in Trust, Trust Litigation

An exculpatory clause is a provision which authorizes the trustee to engage in conduct that would otherwise be a breach of fiduciary duty. Before enacting the Uniform Trust Code, Missouri law was that “[a]n exculpatory clause is valid and not contrary to public policy…absent a showing that the settlor was improperly induced to insert it.” Jarvis v. Boatmen’s National Bank of St. Louis, 478 S.W.2d 266, 274 (Mo. 1972).

Missouri has mostly codified this principal in Section 456.10-1008, RSMo. It clarifies, however, that the inclusion must be “as the result of an abuse by the trustee of a fiduciary or confidential relationship to the settlor.” In addition, the statute provides that a term is unenforceable to the extent it “relieves the trustee of liability for breach of trust committed in bad faith or with reckless indifference to the purposes of the trust or the interests of the beneficiaries.” Section 456.10-1008.1(1), RSMo.