30 Examples of Trustee Self-Dealing

Trustees play a crucial role in the management of trusts, ensuring that the assets held in trust are administered according to the grantor’s wishes and for the benefit of the beneficiaries. However, some trustees may take advantage of their position and engage in self-dealing, which can undermine the integrity of the trust and violate their fiduciary duty. In this blog post, we will discuss 30 examples of trustee self-dealing, so you can better understand this unethical practice and take steps to avoid or address it if it arises in your own trust situation.

Examples of Trustee Self-Dealing

Definition of Trustee Self-Dealing

Trustee self-dealing occurs when a trustee uses their position to make decisions or take actions that benefit themselves at the expense of the trust’s beneficiaries. Self-dealing can take many forms, but it generally involves a breach of the trustee’s fiduciary duty, which requires them to act solely in the best interests of the trust and its beneficiaries.

Examples of Trustee Self-Dealing

  1. Selling trust assets to oneself: A trustee sells property or other assets held in trust to themselves at a below-market price, thereby profiting personally from the transaction.
  2. Purchasing personal assets with trust funds: A trustee uses funds from the trust to purchase personal assets, such as a car or real estate, without authorization from the trust’s terms or beneficiaries.
  3. Excessive trustee compensation: A trustee takes unreasonably high fees or commissions for their services, beyond what is considered fair and reasonable for the duties performed.
  4. Favoring one beneficiary over another: A trustee unfairly distributes trust assets or income to one beneficiary at the expense of another, possibly because of a personal relationship or preference.
  5. Personal loans from trust assets: A trustee borrows money from the trust for personal use without authorization or repaying the loan promptly and with interest.
  6. Improper investment in trustee-owned businesses: A trustee invests trust funds in their own business or another enterprise in which they have a personal stake, creating a conflict of interest.
  7. Colluding with third parties: A trustee engages in secretive or unethical agreements with third parties, such as appraisers or financial advisors, to undervalue trust assets or generate kickbacks for themselves.
  8. Failure to diversify investments: A trustee fails to properly diversify trust investments, resulting in unnecessary risk or financial loss for the trust and its beneficiaries.
  9. Misappropriation of trust funds: A trustee uses trust funds for personal expenses or other unauthorized purposes, effectively stealing from the trust.
  10. Ignoring beneficiary requests: A trustee disregards reasonable requests from beneficiaries for information, distributions, or other trust-related matters, prioritizing their own interests instead.
  11. Charging personal expenses to the trust: A trustee improperly charges personal expenses, such as travel, dining, or entertainment, to the trust.
  12. Failure to keep accurate records: A trustee neglects to maintain detailed and accurate records of trust transactions and activities, making it difficult for beneficiaries to hold the trustee accountable for their actions.
  13. Inadequate trust management: A trustee fails to properly manage trust assets, resulting in financial loss or harm to the trust’s beneficiaries.
  14. Refusing to provide accountings: A trustee refuses to provide periodic accountings or financial statements to the beneficiaries as required by the trust or by law.
  15. Delaying trust distributions: A trustee intentionally delays distributions to beneficiaries in order to benefit themselves, either financially or by maintaining control over trust assets.
  16. Overconcentration of investments: A trustee invests an excessive amount of trust funds in a single investment or asset class, potentially benefiting themselves while exposing the trust to unnecessary risk.
  17. Manipulating trust valuations: A trustee manipulates the valuation of trust assets to benefit themselves, either by inflating the value of assets they want to sell or undervaluing assets they want to acquire.
  18. Misrepresenting trust provisions: A trustee misrepresents the terms of the trust to beneficiaries, either to maintain control over the trust or to benefit themselves financially.
  19. Conflicts of interest in hiring: A trustee hires friends or family members for trust-related services at inflated rates, resulting in personal gain.
  20. Failing to disclose conflicts of interest: A trustee fails to disclose conflicts of interest, such as personal relationships or financial interests in companies involved in trust transactions.
  21. Improperly delegating trustee duties: A trustee delegates their responsibilities to others without proper oversight or due diligence, potentially allowing self-dealing activities to go unnoticed.
  22. Ignoring trust provisions: A trustee disregards specific provisions within the trust, such as limits on their authority or instructions for the distribution of assets, in order to benefit themselves.
  23. Influencing trust investments: A trustee uses their position to influence trust investments in a way that benefits their own financial interests or those of their friends and family.
  24. Failing to enforce trust provisions: A trustee fails to enforce trust provisions that would limit their own self-dealing activities or prevent harm to the trust and its beneficiaries.
  25. Misusing trust property: A trustee uses trust property, such as a house or vehicle, for personal use without proper authorization or compensation to the trust.
  26. Manipulating beneficiary relationships: A trustee manipulates relationships between beneficiaries to create conflicts or gain leverage in trust-related decisions, often for their own benefit.
  27. Ignoring beneficiary concerns: A trustee dismisses or ignores concerns raised by beneficiaries about potential self-dealing activities or other trust mismanagement.
  28. Misleading beneficiaries: A trustee provides misleading or incomplete information to beneficiaries in order to conceal self-dealing activities or maintain control over trust assets.
  29. Failing to disclose relevant information: A trustee withholds relevant information from beneficiaries, such as details of trust transactions or investment performance, to prevent detection of self-dealing activities.
  30. Exploiting a lack of oversight: A trustee takes advantage of limited oversight or accountability mechanisms within the trust to engage in self-dealing activities without detection.


Trustee self-dealing can have serious consequences for both the trust and its beneficiaries, potentially leading to financial loss, damaged relationships, and legal disputes. By being aware of the various forms of self-dealing, beneficiaries and grantors can better protect their interests and ensure that the trust is managed in accordance with its intended purpose.

If you suspect trustee self-dealing in your own trust situation, it is important to consult with an experienced attorney who can help you navigate the complexities of trust law and advocate for your rights as a beneficiary.