Trustee Exemption Clauses: Redundant Or Required?

Article by Archie J. Rabinowitz, B.A., L.L.B.*

1. Introduction

Many testamentary instruments include clauses which are intended to relieve trustees from liability in the execution of their duties. Such exemption clauses, as they will be referred to in this paper, take a variety of forms but are generally quite broad so as to relieve the trustee from consequences stemming from negligence so long as the conduct does not amount to fraud or intentional wrongdoing. As noted by the Ontario Law Reform Commission ("OLRC") in its Report on the Law of Trusts, "trust instruments drawn in this Province, whether testamentary or inter vivos, very often exonerate the trustee from liability for any loss arising from the administration of the trust, if the trustee has acted in good faith".¹