Are Beneficiaries Entitled to Economic Damages When a Trustee Breaches an Obligation(s) of the Trust

HNWUnderstanding When a Trust Should Be Used in NJ

Monetary damagesUnder N.J.S.A. 3B:31-72(a),

[a] trustee who commits a breach of trust is liable to the beneficiaries affected for the greater of: (1) the amount required to restore the value of the trust property and trust distributions to what they would have been had the breach not occurred; or (2) the profit the trustee made by reason of the breach.

Consequential damages are damages that naturally flow as a result of the harm caused by the defendant’s wrongdoing.  For example, if the trustee’s wrongdoing caused economic harm to the beneficiaries that led to lost income and/or profits, those “[l]ost profits may be recoverable if they can be established with a ‘reasonable degree of certainty.'”  Nevertheless, “[a]nticipated profits that are too remote, uncertain, or speculative are not recoverable.”  Ibid.  For a plaintiff to recover lost profits, the amount lost must be certain, and based on “sound fact[s].”  Also, a trial court is within its discretion to award interest on trust funds lost because of a trustee’s neglect.

To discuss your NJ Trust matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at  Please ask us about our video conferencing or telephone consultations if you are unable to come to our office.

By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold Township, Monmouth County, NJ Trust Attorney

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