This text of North Dakota § 59-16-02 ((802) Duty of loyalty) is published on Counsel Stack Legal Research, covering North Dakota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
1.A trustee shall administer the trust solely in the interests of the beneficiaries.
2.Subject to the rights of persons dealing with or assisting the trustee as provided in
section 59-18-12, 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 which is otherwise affected by a conflict between the trustee's
fiduciary and personal interests is voidable by a beneficiary affected by the transaction
unless the transaction was authorized by the terms of the trust; the transaction was
approved by the court; the beneficiary did not commence a judicial proceeding within
the time allowed by section 59-18-05; the beneficiary consented to the trustee's
conduct, ratified the transaction
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1. A trustee shall administer the trust solely in the interests of the beneficiaries.
2. Subject to the rights of persons dealing with or assisting the trustee as provided in
section 59-18-12, 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 which is otherwise affected by a conflict between the trustee's
fiduciary and personal interests is voidable by a beneficiary affected by the transaction
unless the transaction was authorized by the terms of the trust; the transaction was
approved by the court; the beneficiary did not commence a judicial proceeding within
the time allowed by section 59-18-05; the beneficiary consented to the trustee's
conduct, ratified the transaction, or released the trustee in compliance with section
59-18-09; or the transaction involves a contract entered into or claim acquired by the
trustee before the person became or contemplated becoming trustee.
3. 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 the trustee's spouse; the trustee's
descendants, siblings, parents, or their spouses; an agent or attorney of the trustee; or
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.
4. 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 beneficiary.
5. A transaction not concerning trust property in which the trustee engages in the
trustee's individual capacity involves a conflict between personal and fiduciary
interests if the transaction concerns an opportunity properly belonging to the trust.
6. An investment by a trustee in securities of an investment company or investment trust
to which the trustee, or its affiliate, provides services in a capacity other than as trustee
is not presumed to be affected by a conflict between personal and fiduciary interests if
the investment complies with the prudent investor rule of chapter 59-17. In addition to
its compensation for acting as trustee, the trustee may be compensated by the
investment company or investment trust for providing those services out of fees
charged to the trust. If the trustee receives compensation from the investment
company or investment trust for providing investment advisory or investment
management services, the trustee at least annually shall notify the persons entitled
under section 59-16-13 to receive a copy of the trustee's annual report of the rate and
method by which that compensation was determined.
7. In voting shares of stock or in exercising powers of control over similar interests in
other forms of enterprise, the trustee shall act in the best interests of the beneficiaries.
If the trust is the sole owner of a corporation or other form of enterprise, the trustee
shall elect or appoint directors or other managers who will manage the corporation or
enterprise in the best interests of the beneficiaries.
8. If fair to the beneficiaries, an agreement between a trustee and a beneficiary relating
to the appointment or compensation of the trustee; payment of reasonable
compensation to the trustee; a transaction between a trust and another trust,
decedent's estate, or conservatorship of which the trustee is a fiduciary or in which a
beneficiary has an interest; a deposit of trust money in a regulated financial service
institution operated by the trustee; or an advance by the trustee of money for the
protection of the trust is not precluded by this section.
9. The court may appoint a special fiduciary to make a decision with respect to any
proposed transaction that might violate this section if entered into by the trustee.