Iowa Code 633A.4202 – Duty of loyalty — impartiality — confidential relationship
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Terms Used In Iowa Code 633A.4202
- Affirmed: In the practice of the appellate courts, the decree or order is declared valid and will stand as rendered in the lower court.
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Decedent: A deceased person.
- Fiduciary: A trustee, executor, or administrator.
- following: when used by way of reference to a chapter or other part of a statute mean the next preceding or next following chapter or other part. See Iowa Code 4.1
- property: includes personal and real property. See Iowa Code 4.1
- Rule: includes "regulation". See Iowa Code 4.1
- Trustee: A person or institution holding and administering property in trust.
633A.4202 Duty of loyalty — impartiality — confidential relationship.
1. A trustee shall administer the trust solely in the interest of the beneficiaries, and shall act with due regard to their respective interests.
2. Any transaction involving the trust which is affected by a material conflict between the trustee’s fiduciary and personal interests is voidable by a beneficiary affected by the transaction unless one of the following applies:
a. The transaction was expressly authorized by the terms of the trust.
b. The beneficiary consented to or affirmed the transaction or released the trustee from liability as provided in § 633A.4506.
c. The transaction is approved by the court after notice to interested persons.
3. A transaction affected by a material conflict between personal and fiduciary interests includes any sale, encumbrance, or other transaction involving the trust property entered into by the trustee, the spouse, descendant, agent, or attorney of a trustee, or corporation or other enterprise in which the trustee has a substantial beneficial interest.
4. A transaction not involving trust property between a trustee and a beneficiary which 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 an abuse of a confidential relationship unless the trustee establishes that the transaction was fair.
5. This section does not apply to any of the following:
a. An agreement between a trustee and a beneficiary relating to the appointment of the trustee.
b. The payment of compensation to the trustee, whether by agreement, the terms of the trust, or this trust code.
c. A transaction between a trust and another trust, decedent‘s or conservatorship estate of which the trustee is a fiduciary if the transaction is fair to the beneficiaries of the trust.
d. 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 if the investment complies with the prudent investor rule. The trustee may be compensated by the investment company or investment trust for providing services from fees charged to the trust if the trustee provides annual notice and a copy of the trustee’s annual report, including the rate and method by which the trustee’s compensation was determined, to the persons specified in § 633A.4213.
e. A deposit of trust money in a regulated financial service institution operated by the trustee.
99 Acts, ch 125, §48, 109
C2001, §633.4202
2002 Acts, ch 1107, §10; 2005 Acts, ch 38, §54, 55
CS2005, §633A.4202
1. A trustee shall administer the trust solely in the interest of the beneficiaries, and shall act with due regard to their respective interests.
2. Any transaction involving the trust which is affected by a material conflict between the trustee’s fiduciary and personal interests is voidable by a beneficiary affected by the transaction unless one of the following applies:
a. The transaction was expressly authorized by the terms of the trust.
b. The beneficiary consented to or affirmed the transaction or released the trustee from liability as provided in § 633A.4506.
c. The transaction is approved by the court after notice to interested persons.
3. A transaction affected by a material conflict between personal and fiduciary interests includes any sale, encumbrance, or other transaction involving the trust property entered into by the trustee, the spouse, descendant, agent, or attorney of a trustee, or corporation or other enterprise in which the trustee has a substantial beneficial interest.
4. A transaction not involving trust property between a trustee and a beneficiary which 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 an abuse of a confidential relationship unless the trustee establishes that the transaction was fair.
5. This section does not apply to any of the following:
a. An agreement between a trustee and a beneficiary relating to the appointment of the trustee.
b. The payment of compensation to the trustee, whether by agreement, the terms of the trust, or this trust code.
c. A transaction between a trust and another trust, decedent‘s or conservatorship estate of which the trustee is a fiduciary if the transaction is fair to the beneficiaries of the trust.
d. 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 if the investment complies with the prudent investor rule. The trustee may be compensated by the investment company or investment trust for providing services from fees charged to the trust if the trustee provides annual notice and a copy of the trustee’s annual report, including the rate and method by which the trustee’s compensation was determined, to the persons specified in § 633A.4213.
e. A deposit of trust money in a regulated financial service institution operated by the trustee.
99 Acts, ch 125, §48, 109
C2001, §633.4202
2002 Acts, ch 1107, §10; 2005 Acts, ch 38, §54, 55
CS2005, §633A.4202