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.”…
Legal Articles
Cotrustee Breach of Trust
There are additional fiduciary duties in play when there are cotrustees of a trust. If cotrustees are serving, the default rule is that they act by a majority decision. Section 456.7-703.1, RSMo. A cotrustee is under an obligation to participate in the performance of a trustee’s function — unless the trustee is absent, ill, legally…
Trusts: Damages without a Breach
Because of the high fiduciary standards applied to trustees, a beneficiary may still nevertheless hold a trustee liable for damages even when the trustee has not committed a breach of trust. Specifically, a trustee is accountable to an affected beneficiary for any profit made by the trustee arising from the administration, even absent a breach….
Attorney Fees, Trust Litigation, Breach of Trust
Attorney fees are not necessarily awarded to every successful litigant, and they may only be awarded when they are provided for by statute or contract. Berry v. Volkswagen Group of America, Inc., 397 S.W.3d 425, 431 (Mo. 2013). Section 456.10-1004, RSMo generally permits a court to award attorney fees to be paid by any party…
Consent/Ratification to Breach of Trust, Minors
Under certain circumstances, a trust beneficiary can consent to a trustee’s conduct that would otherwise constitute a breach of fiduciary duty. For a consent to be proper, the beneficiary must know of all material facts relating to the breach. Section 456.10-1009(2), RSMo. Missouri law, furthermore, imposes specific limitations on consent or ratification on behalf of…
Virtual Representation, Trust Disputes, Beneficiaries
Many types of trust litigation claims, including most breach of trust claims (e.g., breach of fiduciary duty) against a trustee and trust contests, require that all qualified beneficiaries to the trust be joined as parties. The reasoning is that if the Court is adjudicating a trust in which someone has an interest in, that person…
Special Fiduciary, Trust Litigation, Breach of Trust
In breach of trust litigation, the plaintiff can request a variety of remedies against the trustee. The remedies include, among other things, damages, removal and/or suspension. In more contentious situations, a probate court does have the authority to appoint a “special fiduciary” to administer the trust, in whole or in part, while the suit is…
Voidable Transactions, Trustee Conflicts of Interests, Duty of Loyalty
A trustee owes a fiduciary duty to a beneficiary. Therefore, a trustee is generally not permitted to enter into any transaction that is a conflict between the trustee’s personal interests and fiduciary responsibilities, unless (1) the transaction was authorized by the trust, (2) approved by the Court, (3) consented to or ratified by the beneficiaries,…
Trust Litigation: Breach of Fiduciary Duty, Breach of Trust
Trustees are fiduciaries who must act in the best interests of the beneficiaries. To win on a claim of breach of fiduciary duty or trust, a plaintiff needs to prove that there is a (1) fiduciary duty, (2) a breach of that duty, (3) causation and (4) harm/damages. Matter of Wilma G. James Trust, 487…
Modifying Irrevocable Trusts by Consent
When Missouri updated its trust laws in around 2005, several statutes were added that permitted irrevocable trusts to be modified. An irrevocable trust, as the name suggests, is generally not subject to amendment or change. Most revocable trusts become irrevocable and not subject to change after the settlor/trust-maker dies. The problem is that many irrevocable…