Also known as: serious breaches of trust
Written by attorneys · grounded in primary & secondary sources — see below
A substantial violation by a trustee of core fiduciary duties of loyalty or prudence that endangers the trust's administration or the beneficiaries' interests. The violation may consist of repeated self-dealing, persistent failure to follow trust terms, or ongoing neglect that diverts assets or impairs the trust's purpose.
Prairie Health Alliance served as trustee of a charitable trust created to fund rural health clinics. Over five years the trustee used most trust income for its own overhead and executive bonuses while sending only a small fraction to clinic operations. The state regulator petitioned for removal. The court granted the petition because the repeated diversion of assets from the trust's stated purpose constituted a serious breach of trust.
Gemma served as trustee of a trust holding the family farm for her siblings' benefit. She allowed her own LLC to use the trust land and equipment rent-free and directed the trust to pay all maintenance and fuel costs for the LLC's operations. She never disclosed the arrangement. Jerome, a beneficiary, petitioned for removal. The court ordered removal because the undisclosed self-dealing and use of trust assets for the trustee's personal benefit amounted to a serious breach of trust.
Select any source to read its text and confirm it supports the definition.
A serious breach includes repeated self-dealing, persistent failure to collect trust income, neglect of trust property, or deliberate disregard of express trust terms such as investment restrictions. The breach must be substantial enough to endanger the trust's administration or the beneficiaries' interests rather than a minor or isolated error.
Supporting sources
The settlor, a cotrustee, or a beneficiary may request removal. In a charitable trust the state regulator or attorney general may also petition. The court may act on its own initiative when grounds exist.
Supporting sources
No. The breach need not be intentional. Repeated negligence, reckless disregard of trust terms, or self-dealing that substantially harms the trust can qualify even if the trustee believed the actions were beneficial.
Supporting sources
Yes. Lack of cooperation among cotrustees that substantially impairs administration is an independent ground for removal even without a separate showing of breach. The impairment must materially harm the trust's ability to fulfill its purposes.
Supporting sources