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. Section 456.10-1003., RSMo. However, absent a breach, a trustee is not liable to a beneficiary for a loss or depreciation in trust property or for not having made a profit.

The reasoning is that a trustee should not be allowed to use a trust as a means for personal profit other than for routine compensation earned. For instance, it would be improper for a trustee to receive a commission or bonus from a third-party for actions relating to the trust’s administration.

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