How have the trustees of a trust been found to have breached their fiduciary duties toward the trust by failing to disclose to the trustee that the trustees have a conflict of interest in the trust?

California, United States of America


The following excerpt is from McLaughlin's Estate, In re, 274 P.2d 868, 43 Cal.2d 462 (Cal. 1954):

Finally, Marian contends that the trustees have breached their fiduciary duties toward the trust by occupying positions of conflicting interests, by failing to disclose these facts and the financial conditions of the corporations controlled by the trust, and by concealing their receipt of salaries from the corporations. She relies upon the general rule that '(i)n all matters connected with his trust a trustee is bound [43 Cal.2d 470] to act in the highest good faith toward his beneficiary, and may not obtain any advantage therein over the latter by the slightest misrepresentation, concealment, threat or adverse pressure of any kind.' Overell v. Overell, 78 Cal.App. 251, 256, 248 P. 310, 311.

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