Exculpation Clauses in Trust Instruments

An exculpation clause in a trust instrument is a clause that relieves a trustee from liability for the negligent administration of a trust. A trustee is a person or institution to whom legal title to property is entrusted for the benefit of another. Trustees assume a fiduciary duty in relation to the named beneficiaries on the trust instrument. It is uncertain whether Canadian courts will give legal effect to exculpation clauses that relieve against losses that flow from gross negligence (an act or omission in reckless disregard of the consequences to the safety or property of another person).This project recommends the enactment of a legislative statement concerning the status and enforceability of exculpation clauses.

Keywords: trusts and trustees, Trustee Act, liability, exculpation clauses, trust instruments, wills, estates & life planning, immunity clauses, exoneration clauses, Trustee Act Modernization Committee