Exculpation of trustee.

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(1) 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 withreckless indifference to the purposes of the trust or the interests of the beneficiaries; or

  2. Was inserted as the result of an abuse by the trustee of a fiduciary or confidentialrelationship to the settlor.

(2) An exculpatory term drafted or caused to be drafted by the trustee is invalid as an abuse of a fiduciary or confidential relationship unless the trustee proves that the exculpatory term is fair under the circumstances and that its existence and contents were adequately communicated to the settlor.

Source: L. 2018: Entire article added, (SB 18-180), ch. 169, p. 1185, § 1, effective January 1, 2019.


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