Quora Answer: Is the Trustee of an Irrevocable Trust in a Conflict of Interest if He Owed Money to Grantor?

The following is my answer to a Quora question: “Does the trustee of an irrevocable trust have a conflict of interest if he owes money to the trust due to earlier borrowing from the deceased grantor?”

Yes, there is a clear conflict of interest.  This only becomes untenable if that person is the sole trustee.  If there are other trustees, this conflict of influence is manageable, disclosed and addressed.  This conflict of interest should also be known to the beneficiaries, since this is now their wealth eventually.  In some cases, where there is no satisfactory payment plan, or agreement to forgive the debt, and if there is a doubt on the fiduciary responsibility of that trustee, the trustee may be removed.