What does "self-dealing" refer to in the context of a trust?

Self-dealing in the context of a trust specifically refers to a situation where the trustee uses trust property or assets for their own personal benefit. This can include actions such as selling trust property to themselves, borrowing from the trust, or engaging in transactions that benefit them personally while disregarding the interests of the beneficiaries.

Trustees have a fiduciary duty to act in the best interests of the beneficiaries and to avoid any personal gain from their position. When a trustee engages in self-dealing, it is considered a breach of this duty and can lead to legal consequences, including being required to return profits gained from such actions or even removal from their position as trustee.

The other options provided do not accurately capture the definition of self-dealing. For instance, avoiding a conflict of interest (the first option) is actually the opposite of self-dealing, as it refers to the trustee acting ethically. The equitable distribution of trust assets (the third option) pertains to how assets are allocated among beneficiaries, which does not describe self-dealing. The process of properly informing beneficiaries (the fourth option) focuses on communication rather than the actions of the trustee regarding trust property. Thus, the correct understanding of self-dealing hinges on the improper personal use of trust assets