What does the duty of loyalty require a trustee to avoid?

The duty of loyalty is a fundamental principle in trust law that requires a trustee to act in the best interests of the beneficiaries and to avoid any conflicts of interest. Engaging in self-dealing would violate this duty because it involves a trustee taking actions that benefit themselves, potentially at the expense of the beneficiaries. Such actions can jeopardize the trust's integrity and compromise the beneficiaries' rights and interests.

When a trustee engages in self-dealing, they prioritize their personal interests over their fiduciary obligations, which is contrary to the essence of the trustee's role. This principle ensures that trustees are held accountable to act solely for the benefit of the beneficiaries, which maintains trust placements' fairness and reliability.

While commingling assets and failing to provide accounting are indeed serious breaches of trust duties, they do not specifically relate to the conflict of interest that the duty of loyalty addresses like self-dealing does. Neglecting to inform beneficiaries also reflects a failure in communication and transparency but does not implicate personal gain or conflict of interest. Thus, self-dealing is the most direct violation of that loyalty to the beneficiaries.