An agent with discretionary authority, that is a non-ministerial one, owes the principal fiduciary duties. All trustees, on the other hand, are fiduciaries. A trustee has a duty to act solely in the interest of the beneficiary in matters involving the trust property. The trustee, however, may have occasion to deal with the beneficiary in matters unrelated to the trust property, such as acquiring for himself the beneficiary’s personal residence, which is not in trust. While such dealings are not forbidden per se, they can carry with them a rebuttable presumption of undue influence. “Even though not within the fiduciary relation inherent in trust administration, the trustee’s personal dealings with beneficiaries of the trust may involve a confidential relationship that is sufficiently natural to the parties’ roles in the trust relationship to be recognized by the trust law as an incident or extension of the intense duty of loyalty applicable to trustees.” Rest. (Third) of Trusts §78, cmt. g.

A trustee-beneficiary transaction is particularly vulnerable to voidance if the parties also were in a separate fiduciary relationship of confidence at the time of the transaction and the trustee abused that relationship, such as when the trustee also was the beneficiary’s attorney-at-law, an attorney-at-law being a non-ministerial agent.

There can be vulnerability, as well, in the separate non-fiduciary confidential context, such as when the trustee also is the beneficiary’s priest, professor, adult child, or physician. Being neither non-ministerial agencies nor trusteeships, they are not ipso facto fiduciary relationships. A confidential non-fiduciary relationship exists between two persons when one has gained the confidence of the other and purports to act or advise with the other's interest in mind. For a non-fiduciary confidential relationship to arise, however, there must be reliance on the part of the one reposing the confidence. A fiduciary relationship, on the other hand, brings with it a duty of undivided loyalty reliance or no reliance.

Assume trustee wishes to purchase for his own benefit beneficiary’s personal residence, which is not a trust asset. The trustee also is dominant in some separate non-fiduciary confidential relationship with beneficiary. Trustee by chance while on vacation learns from a third party that a proposed zoning change is likely to increase the property’s market value. Beneficiary is self-evidently unaware of proposed zoning change. Trustee keeps quiet. Instead, he induces beneficiary not to seek independent advice and proceeds to exploit beneficiary's ignorance to the trustee's advantage. Both relationships have been abused, the one of trust and the one of confidence. Sale is voidable. Had there been no separate confidential relationship, then sale would not be voidable. See Rest. (Third) of Trusts §2 cmt. b(1), illus. 1. Even in the absence of a separate confidential relationship, the trustee would need the beneficiary’s informed consent to exploit confidential information acquired by trustee in the course of administering trust. As trustee will have burden of showing that no advantage of position or influence had been taken, trustee would benefit if beneficiary were represented by independent counsel in matter.

The non-fiduciary “dominant-subservient” relationship, particularly the abusive hired caregiver and the enfeebled care recipient, is not really one of confidence. But see Rest. (Third) of Property (Wills & Don. Trans.) §8.3, cmt. g. No matter. A transaction consummated under duress is voidable per se. As to the liabilities of disloyal agent-fiduciaries, see §9.9.2 of Loring and Rounds: A Trustee’s Handbook (2023). Section reproduced in appendix below. Handbook available for purchase at https://law-store.wolterskluwer.com/s/product/loring-rounds-trustees-hanbook-2023e/01t4R00000Ojr97QAB.