1. A trustee shall administer the trust solely in the interest of the beneficiaries, and shall act with due regard to their respective interests.
2. Any transaction involving the trust which is affected by a substantial conflict between the trustee's fiduciary and personal interests is voidable by a beneficiary affected by the transaction unless one of the following applies:
a. The transaction was expressly authorized by the terms of the trust.
b. The beneficiary consented to or affirmed the transaction or released the trustee from liability as provided in section 633.4506.
c. The transaction is approved by the court after notice to interested persons.
3. A transaction affected by a substantial conflict between personal and fiduciary interests includes any sale, encumbrance, or other transaction involving the trust property entered into by the trustee, the spouse, descendant, agent, or attorney of a trustee, or corporation or other enterprise in which the trustee has a substantial beneficial interest.
4. A transaction not involving trust property between a trustee and a beneficiary which occurs during the existence of the trust or while the trustee retains significant influence over the beneficiary and from which the trustee obtains an advantage is an abuse of a confidential relationship unless the trustee establishes that the transaction was fair.
5. This section does not apply to any of the following:
a. An agreement between a trustee and a beneficiary relating to the appointment of the trustee.
b. The payment of compensation to the trustee, whether by agreement, the terms of the trust, or this trust code.
c. A transaction between a trust and another trust, decedent's or conservatorship estate of which the trustee is a fiduciary if the transaction is fair to the beneficiaries of the trust.
99 Acts, ch 125, §48, 109
Section effective July 1, 2000; 99 Acts, ch 125, §109
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