Which duty prohibits self-dealing or conflicts of interest to protect beneficiaries?

Which duty prohibits self-dealing or conflicts of interest to protect beneficiaries?

• A. TRUSTEE LOYALTY
• B. TRUSTEE SELF-DEALING
• C. TRUSTEE PRUDENCE
• D. TRUSTEE DISCLOSE AND ACCOUNT

Answer: (A)

The duty of loyalty is about putting beneficiaries’ interests first and avoiding self‑dealing or conflicts of interest. A trustee may not benefit personally from trust assets, may not engage in transactions with related parties that put the trustee’s interests ahead of the beneficiaries, and must disclose any potential conflicts and seek consent or recuse when required. This obligation directly protects beneficiaries by preventing the trustee from using the trust for personal gain. Other duties address how the trust is managed or reported—the prudent management duty governs investments, while the disclose-and-account duty focuses on transparency—so they don’t directly impose the blanket prohibition on conflicts in the same way.

The duty of loyalty is about putting beneficiaries’ interests first and avoiding self‑dealing or conflicts of interest. A trustee may not benefit personally from trust assets, may not engage in transactions with related parties that put the trustee’s interests ahead of the beneficiaries, and must disclose any potential conflicts and seek consent or recuse when required. This obligation directly protects beneficiaries by preventing the trustee from using the trust for personal gain. Other duties address how the trust is managed or reported—the prudent management duty governs investments, while the disclose-and-account duty focuses on transparency—so they don’t directly impose the blanket prohibition on conflicts in the same way.