Duty of Loyalty to Beneficiaries

A. A trustee shall administer the trust solely in the interests of the beneficiaries. B. Subject to the rights of persons dealing with or assisting the trustee as provided in section 14-11012, a sale, encumbrance or other transaction involving the investment or management of trust property entered into by the trustee for the trustee's own personal account or that is otherwise affected by a conflict between the trustee's fiduciary and personal interests is voidable by a beneficiary affected by the transaction unless either: 1. The transaction was authorized by the terms of the trust. 2. The transaction was approved by the court. 3. The beneficiary did not commence a judicial proceeding within the time allowed by section 14-11005. 4. The beneficiary consented to the trustee's conduct, ratified the transaction or released the trustee in compliance with section 14-11009. 5. The transaction involves a contract entered into or claim acquired by the trustee before the person became or contemplated becoming trustee. C. A sale, encumbrance or other transaction involving the investment or management of trust property is presumed to be affected by a conflict between personal and fiduciary interests if it is entered into by the trustee with: 1. The trustee's spouse. 2. The trustee's descendants, siblings or parents or their spouses. 3. An agent or attorney of the trustee. 4. A corporation or other person or enterprise in which the trustee, or a person that owns a significant interest in the trustee, has an interest that might affect the trustee's best judgment. D. A transaction between a trustee and a beneficiary that does not concern trust property but that 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 voidable by the beneficiary unless the trustee establishes that the transaction was fair to the benefic...