Article On Trust Protector and Fiduciary Liability Article Published

Alexander A Bove, Jr. recently published an article entitled, Conquering the Fear of Fiduciary Duty, Tr. & Est., Apr. (2016).  provided below is his summary of the article:

When agreeing to serve as Trust Protector, many attorneys and other advisors insist on a provision in the trust stating that the protector shall not be deemed a fiduciary. They do this, apparently, because a fiduciary serving in a trust has certain responsibilities to act consistent with the purposes of the trust and the interests of the beneficiaries, and if they fail to do that, they could be charged with a breach of fiduciary duty. It seems they believe that if they are not designated as a fiduciary, then they’ll not be exposed to such liability.

This fear of fiduciary duty is not only misplaced, but it could actually expose the protector to greater liability than might otherwise be provided in the trust. It is common knowledge that a fiduciary can be exculpated for all except bad faith, fraud, and willful misconduct, whereas a party who is found by a court to be acting as a fiduciary, despite a trust provision to the contrary, may be held by the court to a much higher standard. If we are acting in a position that is essential to the proper administration of the trust, let’s admit to the responsibility, include proper exculpation for our acts, and conquer the fear of fiduciary duty.