Utah Trust Law: Remedies and Liabilities for Breach of Trust, Exercises of Remedies

Download Utah Trust Law: Remedies and Liabilities for Breach of Trust and more Exercises Remedies in PDF only on Docsity! Utah Code Page 1 Part 10 Liability of Trustees and Rights of Persons Dealing with Trustee 75-7-1001 Remedies for breach of trust. (1) A violation by a trustee of a duty the trustee owes to a beneficiary is a breach of trust. (2) To remedy a breach of trust that has occurred or may occur, the court may: (a) compel the trustee to perform the trustee's duties; (b) enjoin the trustee from committing a breach of trust; (c) compel the trustee to redress a breach of trust by paying money, restoring property, or other means; (d) order a trustee to account; (e) appoint a special fiduciary to take possession of the trust property and administer the trust; (f) suspend the trustee; (g) remove the trustee as provided in Section 75-7-706; (h) reduce or deny compensation to the trustee; (i) subject to Section 75-7-1012, void an act of the trustee, impose a lien or a constructive trust on trust property, or trace trust property wrongfully disposed of and recover the property or its proceeds; or (j) order any other appropriate relief. Enacted by Chapter 89, 2004 General Session 75-7-1002 Damages for breach of trust. (1) A trustee who commits a breach of trust is liable to the beneficiaries affected for the greater of: (a) the amount required to restore the value of the trust property and trust distributions to what they would have been had the breach not occurred; or (b) the profit the trustee made by reason of the breach. (2) Except as otherwise provided in this Subsection (2), if more than one trustee is liable to the beneficiaries for a breach of trust, a trustee is entitled to contribution from the other trustee or trustees. A trustee is not entitled to contribution if the trustee was substantially more at fault than another trustee or if the trustee committed the breach of trust in bad faith or with reckless indifference to the purposes of the trust or the interests of the beneficiaries. A trustee who received a benefit from the breach of trust is not entitled to contribution from another trustee to the extent of the benefit received. Enacted by Chapter 89, 2004 General Session 75-7-1003 Damages in absence of breach. (1) A trustee is accountable to an affected beneficiary for any profit made by the trustee arising from the administration of the trust, even absent a breach of trust. (2) Absent a breach of trust, a trustee is not liable to a beneficiary for a loss or depreciation in the value of trust property or for not having made a profit. Enacted by Chapter 89, 2004 General Session 75-7-1004 Attorney's fees and costs. Utah Code Page 2 (1) In a judicial proceeding involving the administration of a trust, the court may, as justice and equity may require, award costs and expenses, including reasonable attorney's fees, to any party, to be paid by another party or from the trust that is the subject of the controversy. (2) If a trustee defends or prosecutes any proceeding in good faith, whether successful or not, the trustee is entitled to receive from the trust the necessary expenses and disbursements, including reasonable attorney's fees, incurred. Enacted by Chapter 89, 2004 General Session 75-7-1005 Limitation of action against trustee. (1) A beneficiary may not commence a proceeding against a trustee for breach of trust more than six months after the date that the beneficiary or a person who may represent and bind the beneficiary was sent a report that adequately disclosed the existence of a potential claim for breach of trust and informed the beneficiary of the time allowed for commencing a proceeding. (2) A report adequately discloses the existence of a potential claim for breach of trust if it provides sufficient information so that the beneficiary or representative knows of the potential claim or should have inquired into its existence. (3) If Subsection (1) does not apply, a judicial proceeding by a beneficiary against a trustee for breach of trust must be commenced within one year after the first to occur of: (a) the removal, resignation, or death of the trustee; (b) the termination of the beneficiary's interest in the trust; or (c) the termination of the trust. (4) This section does not preclude an action to recover for fraud or misrepresentation related to the report. Enacted by Chapter 89, 2004 General Session 75-7-1006 Reliance on trust instrument. A trustee who acts in reasonable reliance on the terms of the trust as expressed in the trust instrument is not liable to a beneficiary for a breach of trust to the extent the breach resulted from the reliance. Enacted by Chapter 89, 2004 General Session 75-7-1007 Event affecting administration or distribution. If the happening of an event, including marriage, divorce, performance of educational requirements, or death, affects the administration or distribution of a trust, a trustee is not liable for a loss resulting from the trustee's lack of knowledge or lack of notice. Enacted by Chapter 89, 2004 General Session 75-7-1008 Exculpation of trustee. A term of a trust relieving a trustee of liability for breach of trust is unenforceable to the extent that it: (1) relieves the trustee of liability for breach of trust committed in bad faith or with reckless indifference to the purposes of the trust or the interests of the beneficiaries; or (2) was inserted by the trustee or fiduciary without disclosure of its existence and contents.