{"data":{"id":"us-nj/n.j.-stat.-3b-31-55","jurisdiction":"us-nj","citation":"N.J. Stat. § 3B:31-55","heading":"Duty of loyalty.","body":"Duty of Loyalty.\na.\tA trustee shall administer the trust with undivided loyalty to and solely in the best interests of the beneficiaries.\nb.\tSubject to the rights of persons dealing with or assisting the trustee as provided in N.J.S.3B:14-37, 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:\n(1)\tthe transaction was authorized by the terms of the trust;\n(2)\tthe transaction was approved by the court;\n(3)\tthe beneficiary did not commence a judicial proceeding within the time allowed by  N.J.S.3B:31-74;\n(4)\tthe beneficiary consented to the trustee's conduct, ratified the transaction, or released the trustee in compliance with  N.J.S.3B:31-78; or\n(5)\tthe transaction involves a contract entered into or a claim acquired by the trustee before the person became a trustee.\nc.\tA 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:\n(1)\tthe trustee's spouse or partner in a civil union;\n(2)\tthe trustee's parents, parents' descendants, or the spouse or partner in a civil union of any of the foregoing;\n(3)\tan agent, accountant, or attorney of the trustee; or\n(4)\ta 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 judgment.\nd.\tA 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 attributable to the existence of the trust is voidable by the beneficiary if the beneficiary establishes that the transaction was unfair to the beneficiary.\ne.\tA 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.\nf.\tIn voting shares of stock of a corporation 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 and shall vote to elect or appoint directors or other managers who will manage the corporation or enterprise in the best interests of the beneficiaries.\ng.\tThis section does not preclude the following transactions, if fair to the beneficiaries:\n(1)\tan agreement between a trustee and a beneficiary relating to the appointment or compensation of the trustee;\n(2)\tpayment of reasonable compensation to the trustee;\n(3)\ta transaction between the trust and another trust, decedent's estate, guardianship, conservatorship, or other fiduciary relationship of which the trustee is a fiduciary or in which a beneficiary has an interest;\n(4)\ta deposit of trust money in a regulated financial-service institution operated by or affiliated with the trustee; or\n(5)\tan advance by the trustee of money for the protection of the trust.\nh.\tThe court may appoint a special fiduciary to make decisions with respect to any proposed transaction that might violate this section if entered into by the trustee.\nL.2015, c.276, s.1.","path":["TITLE 3B ADMINISTRATION OF ESTATES--DECEDENTS AND OTHERS"],"source_url":"https://pub.njleg.state.nj.us/statutes/STATUTES-TEXT.zip","current_through":"P.L.2025, c.405, and J.R.22","vintage":"","retrieved_at":"2026-08-27T17:54:13Z","sha256":"d5a243a4ed6ab1a5780ce462b7a00b928089c220cb11321c8332f1ccbf565cf7","source_id":"us-nj","stale":true,"prev":"us-nj/n.j.-stat.-3b-31-54","next":"us-nj/n.j.-stat.-3b-31-56"},"notice":"GroundRules: Original legal text. Not legal advice."}