If a trustee acts with a conflict of interest, what is one potential consequence?

When a trustee acts with a conflict of interest, one potential consequence is judicial removal from their position. Trustees have a fiduciary duty to act in the best interests of the beneficiaries of the trust. When they are found to have conflicts that compromise their ability to fulfill this duty, a court can intervene to protect the beneficiaries' interests. This may involve removing the trustee to prevent any further breaches of fiduciary duty and to ensure that the trust is managed appropriately and impartially.

This removal serves not only to protect the beneficiaries but also reinforces the principle that fiduciaries must operate without self-interest or divided loyalties. The legal framework surrounding trusts emphasizes accountability and trustworthiness, reflecting the importance of the trustee's role in maintaining the integrity of the trust's administration. Other options, such as increased trust funding, legal immunity, or greater discretion in decision-making, do not align with the implications of a conflict of interest and the resulting accountability mechanisms present in trust law.