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University of Michigan Law School

2012

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Fiduciary Duties And Exculpatory Clauses: Clash Of The Titans Or Cozy Bedfellows, Louise Lark Hill Jun 2012

Fiduciary Duties And Exculpatory Clauses: Clash Of The Titans Or Cozy Bedfellows, Louise Lark Hill

University of Michigan Journal of Law Reform

Centuries ago, when land represented the majority of wealth, the trust was used primarily for holding and transferring real property. As the dominant form of wealth moved away from family land, the trust evolved into a device for managing financial assets. With this transformation came the use of exculpatory clauses by both amateur and professional trustees, providing an avenue for these fiduciaries to escape liability for designated acts. With the use of exculpatory provisions, discussion abounded about whether fiduciary duties were mandatory or subject to modification. The latter view eventually prevailed, with the majority of jurisdictions viewing fiduciary duties as ...