Increasingly, trust instruments grant trustees “discretion” to do certain acts. Drafters include this language to account for unanticipated circumstances and make a trustee’s life easier. But even where a trustee has discretion, they can act improperly. “A grant of absolute discretion to a trustee is not a roving commission – the trustee must be guided…
Legal Articles
Trustee Record Keeping Duty
A trustee is required to “keep adequate records of the administration of the trust.” Section 456.8-810, RSMo. This is closely related to the duties to act with prudence and report and inform to the beneficiaries. Failure to follow any of these duties is a breach of trust. It could lead to a damages claim. If…
Reliance on Trust Instrument
A trustee who reasonably relies on the language of a trust is not liable for breach of trust if the breach resulted from the reliance. Section 456.10-1006, RSMo. A court may, for example, modify, reform, or construe the trust in a way that it deviates from the plain language of the trust. If this is…
Breach of Trust, Sole Discretion
Fiduciary and trust litigation can be very complex. In certain trust instruments, a trustee is granted “sole discretion” to do certain things. This language, however, can be very misleading. Even when a trustee is granted “sole discretion,” a trustee may be liable if the trustee willfully abuses his discretion, acts arbitrarily, fraudulently, dishonestly, or with…
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.”…
Expert Witness Standards in Probate
Section 490.065.1, RSMo governs the admissibility of expert testimony in all proceedings in the probate court. So, this applies to most or all trust and estate litigation, including breach of trust claims and trust contest claims. Among other things, the statute requires that the facts or data on which the expert relied must be the…
Causation
In most cases in which a plaintiff brings a lawsuit — whether it be for breach of trust or even a personal injury claim — the plaintiff must prove causation. In other words, the plaintiff must demonstrate that the defendant’s improper conduct actually caused cognizable harm to the plaintiff. In certain circumstances, like medical malpractice…
Trustee Discretion in Breach of Trust Claims
“A violation by a trustee of a duty the trustee owes to beneficiary is a breach of trust.” Section 456.10-1001, RSMo. Despite this broad statutory principle, and depending on the context, a trustee can have a number of defenses to a breach of trust claim. For example, where a trust instrument grants a trustee discretionary…
Trustee Bond
A trustee’s bond is essentially an insurance policy which designates a sum of money that may be recovered to the extent a trustee mismanages a trust estate. For example, if a trustee has a bond, and misappropriates assets, a beneficiary may be able to initiate a claim for breach of trust and recover against the…
Calculating Damage for Breach of Trust Claims
A violation by a trustee of a duty the trustee owes to a beneficiary is a breach of trust. Section 456.10-1001.1 RSMo; Weldon Revocable Trust v. Weldon, 231 S.W.3d 158, 179 (Mo. Ct. App. 2007). Assuming a beneficiary is able to establish a breach of trust, the measure of damage is a different analysis. Generally,…