Does a fiduciary have the same or different standard of care toward a "remainderman" as an income beneficiary?

Question

One of my friends is the "remainder(wo)man" of a trust that was worth $1.5 million at the end of 2008 (the last bear market year), and invested in a 60-40 mix of stocks and bonds. Since then, the stock market has roughly quadrupled, and bonds have also been in a bull market. yet the trust is now worth only $1.3 million, because of interim distributions to the income beneficiary.

My understanding is that in most trusts, the main beneficiary is supposed to get the income, and the remaindermen the principal (including capital gains). And yet, it seems like the income beneficiary has gotten BOTH income and capital gains, and the remainderman has gotten stuck with the fees and the (occasional) loss years, like 2015 and 2018.

We were discussing this with a third party, X, when X offered an intriguing opinion. X's opinion was that the fiduciary owed a HIGH degree of care to the beneficiary, and only a "lesser" (moderate or slight) to the remainderman. If true, that might explain why the fiduciary appeared to favor the income beneficiary so much.

Is this in fact the case, or does the fiduciary appear to be remiss in its duty to the remainderman? And if so, to what degree (ordinary negligence, gross negligence, or more)? My understanding is that the fiduciary needs to take "some" care not to injure the interests of the remainderman. What level of care is this?

Answer 1

A fiduciary owes the same duty of care towards all beneficiaries.

This doesn't mean that they all should have equal consideration in substantive distribution or that a fiduciary has to never make decisions that favor one beneficiary over another, but the fiduciary still is held to the same standard of care towards all beneficiaries so far as trust administration goes.