(a) A trustee shall administer the trust solely in the interests of the beneficiaries.
(b) Subject to the rights of persons dealing with or assisting the trustee as provided in Section 19-3B-1012, 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:
(1) the transaction was authorized by the terms of the trust;
(2) the transaction was approved by the court;
(3) the beneficiary did not commence a judicial proceeding within the time allowed by Section 19-3B-1005;
(4) the beneficiary consented to the trustee's conduct, ratified the transaction, or released the trustee in compliance with Section 19-3B-1009; or
(5) 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:
(1) the trustee's spouse;
(2) the trustee's descendants, siblings, parents, or their spouses;
(3) an agent or attorney of the trustee; or
(4) 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 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.
(e) A trustee that is a regulated financial institution may engage in transactions with departments of the institution, with related affiliates of the institution, or other business entities of the institution. Transactions are not presumed to be affected by a conflict of interest between a trustee's personal and fiduciary interests provided that the transaction and any investment made pursuant to the transaction otherwise complies with the Prudent Investor Rule of Article 9. Transactions may include, but not be limited to, the following:
(1) investment by a trustee in securities of, or other interests in, any entity to which the trustee, or its affiliates, provides services, including, without limitation, any common trust fund or other collective investment fund maintained by any regulated financial institution, any open-end or closed-end management type investment company or investment trust registered under the Investment Company Act of 1940, as from time to time amended, (the "Investment Company Act"), or any entity that is exempt from the definition of investment company by Section 3(c) of the Investment Company Act;
(2) an investment by a trustee in an insurance contract purchased from an insurance agency owned by or affiliated with the trustee or its affiliate;
(3) the placing of securities transactions by a trustee through a securities broker-dealer that is a part of the same company as the trustee, is owned by the trustee, or is affiliated with the trustee;
(4) the borrowing of funds or entering into any lending relationship by a trustee with a related department or its affiliate company; and
(5) the purchase of bonds for which the trustee in another capacity performed services as underwriter of the bonds or participates in the distribution of the bonds. If the trustee receives compensation for any transaction described in this subsection in addition to fees charged to the trust, or from the affiliate business entity, then the trustee must at least annually notify the persons entitled under Section 19-3B-813(a) to receive a copy of the trustee's annual report, prospectus, or other report, of the rate and method by which the compensation was determined.
(f) 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, then the trustee shall elect or appoint directors or other managers who will manage the corporation or enterprise in the best interests of the beneficiaries.
(g) This section does not preclude the following transactions, if fair to the beneficiaries:
(1) an agreement between a trustee and a beneficiary relating to the appointment or compensation of the trustee;
(2) payment of reasonable compensation to the trustee;
(3) 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;
(4) a deposit of trust money in a regulated financial-service institution operated by the trustee; or
(5) an advance by the trustee of money for the protection of the trust and for any or all expenses, losses, and liabilities sustained in the administration of the trust or as a result of the holding or ownership of any asset by the trust.
(h) 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.