The duty of loyalty has been held to require that trustees administer a trust solely in the interest of the beneficiary. Not even the slightest hint of self-dealing is tolerable in the relationship between a fiduciary and those whose interests he or she is to protect. As stated in Meinhard v. Salmon, “[u]ncompromising rigidity has been the attitude of the courts of equity when petitioned to undermine the rule of undivided loyalty by the ‘disintegrating erosion’ of particular exceptions.”1

In attempting to address the problem of self-dealing, a bright-line prohibition has evolved in trust law so that where self-dealing is found, the court will make “no further inquiry.” The fairness or unfairness of the transaction is “immaterial” and is simply not considered by the court.2 The transaction itself is voidable by the beneficiaries.3

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