(UTC 1008) (a) A term of a trust relieving a trustee of liability for breach of trust is unenforceable to the extent that it:

(1) relieves the trustee of liability for breach of trust committed in bad faith or with reckless indifference to the purposes of the trust or the interests of the beneficiaries; or

(2) was inserted as the result of an abuse by the trustee of a fiduciary or confidential relationship to the settlor.

(b) An exculpatory term drafted or caused to be drafted by the trustee is invalid as an abuse of a fiduciary or confidential relationship unless the trustee proves that the exculpatory term is fair under the circumstances and that its existence and contents were adequately communicated to the settlor.

Annotations

An exculpatory clause in a trust agreement is invalid where the attorney who drafted the trust agreement never met with the settlor or explained the terms of the trust and the respective duties of each party. Rafert v. Meyer, 290 Neb. 219, 859 N.W.2d 332 (2015).

The beneficiaries alleged sufficient facts for a court to find that the trustee acted in bad faith or reckless indifference to the purposes of the trust or the interests of the beneficiaries by providing a false address to the insurers of life insurance policies, which were the sole trust property. Rafert v. Meyer, 290 Neb. 219, 859 N.W.2d 332 (2015).