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Self-Dealing

Overview

Self-Dealing is when a person acts as a trustee and an individual interested person in which the trustee profits improperly. The trustee’s duty of loyalty requires the trustee to avoid this sort of situation and prohibits the trustee from having a personal relationship when acting as trustee. There are exceptions to this, however. The trustee can self-deal when the trustee has prior informed consent and approval from all beneficiaries, prior permission from the court is obtained, and the trust document permits the trustee to participate in self-dealing.