4-10-802. Duty of loyalty.

(a) A trustee shall administer the trust solely in the interests of the beneficiaries.

(b) Subject to the rights of persons dealing with a fiduciary as provided in W.S. 4-10-1013, a sale, encumbrance or other transaction involving the investment or management of trust property entered into by the trustee for the trustee's own personal account or which is otherwise affected by a conflict between the trustee's fiduciary and personal interests is voidable by a beneficiary affected by the transaction unless:

(i) The transaction was authorized by the terms of the trust;

(ii) The transaction was approved by the court;

(iii) The beneficiary did not commence a judicial proceeding within the time allowed by W.S. 4-10-1005;

(iv) The beneficiary consented to the trustee's conduct, ratified the transaction or released the trustee pursuant to W.S. 4-10-1009; or

(v) The transaction involves a contract entered into or claim acquired by the trustee before the person became or contemplated becoming trustee.

(c) A sale, encumbrance or other transaction involving the investment or management of trust property is presumed to be affected by a conflict between personal and fiduciary interests if it is entered into by the trustee with:

(i) The trustee's spouse;

(ii) The trustee's descendants, siblings, parents or their spouses;

(iii) An agent or attorney of the trustee; or

(iv) A corporation or other person or enterprise in which the trustee, or a person that owns a significant interest in the trustee, has an interest that might affect the trustee's best judgment.

(d) A transaction between a trustee and a beneficiary that does not concern trust property but that occurs during the existence of the trust or while the trustee retains significant influence over the beneficiary and from which the trustee obtains an advantage beyond the normal commercial advantage from such a transaction, is voidable by the beneficiary unless the trustee establishes that the transaction was fair to the beneficiary.

(e) A transaction not concerning trust property in which the trustee engages in the trustee's individual capacity involves a conflict between personal and fiduciary interests if the transaction concerns an opportunity properly belonging to the trust.

(f) An investment by a trustee in securities of an investment company or investment trust to which the trustee, or its affiliate, provides services in a capacity other than as trustee is not presumed to be affected by a conflict between personal and fiduciary interests if the investment complies with the prudent investor rule as specified under article 9 of this act. The trustee may be compensated by the investment company or investment trust for providing those services out of fees charged to the trust if, as a condition precedent to receipt of such compensation, and at least annually, the trustee notifies the persons entitled under W.S. 4-10-813 to receive a copy of the trustee's annual report of the rate and method by which the compensation is determined by delivery of a prospectus or other communication.

(g) In voting shares of stock or in exercising powers of control over similar interests in other forms of enterprise, the trustee shall act in the best interests of the beneficiaries. If the trust is the sole owner of a corporation or other form of enterprise, the trustee shall elect or appoint directors or other managers who will manage the corporation or enterprise in the best interests of the beneficiaries.

(h) This section does not preclude the following transactions, if fair to the beneficiaries:

(i) An agreement between a trustee and a majority of the qualified beneficiaries relating to the appointment or compensation of the trustee;

(ii) Payment of reasonable compensation to the trustee;

(iii) A transaction between a trust and another trust, decedent's estate or conservatorship of which the trustee is a fiduciary or in which a beneficiary has an interest;

(iv) A deposit of trust money in a regulated financial services institution operated by the trustee; or

(v) An advance by the trustee of money for the protection of the trust.

(j) The court may appoint a special fiduciary to make a decision with respect to any proposed transaction that might violate this section if entered into by the trustee.

(k) There is no presumption of a conflict of interest when a trustee:

(i) Makes an investment in an insurance contract purchased from an insurance agency owned by, or affiliated with, the trustee, or any of its affiliates; or

(ii) Places securities through a securities broker that is part of the same company as the trustee, is owned by the trustee or is affiliated with the trustee provided the investment complies with the prudent investor rule contained in the Uniform Prudent Investor Act under W.S. 4-10-901 through 4-10-913 and the trustee at least annually notifies qualified beneficiaries of the rate and method by which the trustee receives compensation.