A. A trustee is accountable to an affected beneficiary for any profit made by the trustee arising from the administration of the trust, even absent a breach of trust.

B. Absent a breach of trust, a trustee is not liable to a beneficiary for a loss or depreciation in the value of trust property or for not having made a profit.

History: Laws 2003, ch. 122, § 10-1003.

Effective dates. — Laws 2003, ch. 122, § 11-1106 made the act effective July 1, 2003.

A trustee is prohibited from profiting from the trust. — A trustee may not retain any personal profit, whether or not there has been a breach of the duty of loyalty. The New Mexico Uniform Trust Code requires that a trustee disgorge all personal profit. Miller v. Bank of America, 2015-NMSC-022, rev'g 2014-NMCA-053, 326 P.3d 20.

Where trustee bank, in a breach of its duty of care, invested trust assets in an unproductive commercial building in direct violation of express trust provisions, which caused an $894,000 loss in the value of the trust, arranged loans to the trust from the bank's own affiliates that were secured by mortgages on the building, and collected loan fees and mortgage interest from the trust in breach of its duty of loyalty, and where the district court awarded $171,000 in damages without discussing the actual method of calculation for the restoration award, the court of appeals reversed the district court and awarded plaintiffs $894,000 to restore the value of the trust, but did not award disgorgement damages, holding that an award of restoration damages and disgorgement damages would amount to a double recovery. The New Mexico supreme court reversed the court of appeals, holding that both restoration and disgorgement damages were required under the New Mexico Uniform Trust Code, and remanded the case back to the district court for a recalculation of damages because it was unclear whether disgorgement damages, the mortgage interest and loan fees paid to the trustee, were included in the calculation of the restoration award. Miller v. Bank of America, 2015-NMSC-022, rev'g 2014-NMCA-053, 326 P.3d 20.