Section 2.44 Abusive Exercise of Discretionary Powers

• Library: Trusts and Powers 2013 Supp

c. (§2.44) Abusive Exercise of Discretionary Powers

A trustee can properly exercise those powers that are conferred by the terms of the trust or that may be inferred by the nature of the trust relationship and are necessary or appropriate to carry out the trust purposes, Restatement (Second) of Trusts §§ 164 and 186 (1959), unless the exercise would be illegal, Restatement (Second) of Trusts § 166. Except that, if a power becomes necessary to accomplish the purposes of the trust because of a change of circumstance, a trustee cannot, except in emergency, exercise an unconferred power without court approval. Restatement (Second) of Trusts §§ 167 and 186 cmt. c. Section 456.8-816, RSMo Supp. 2005, specifies 27 powers conferred upon a trustee without court approval.

Until August 28, 1996, the standard for a trustee in exercising its powers was that of a prudent person rather than a prudent investor. In fact, actions and decisions taken before that date are still governed according to actions or decisions taken by “a trustee whose exercise of trust powers is reasonable and equitable in view of the interests of income or principal beneficiaries, or both, and in view of the manner in which men of ordinary prudence, diligence, discretion, and judgment would act in the management of the affairs of others.” See former § 469.500.1(a), RSMo...