Every dollar was repaid. The trust corpus suffered no loss. The trustee acted in good faith. None of it mattered.
In In re Will of Cameron, 335 A.3d 760 (Pa. Super. 2025), the Pennsylvania Superior Court affirmed a surcharge against a trustee who borrowed from the trust to fund a family marijuana business. The court didn’t just surcharge the trustee for his personal gain. It surcharged him for the full financial benefit received by his wife, son, stepdaughter, and her husband — including the equity they extracted from the business.
The lesson is stark: when a trustee self-deals, good faith and repayment are not defenses. The surcharge measures the benefit conferred, not the loss to the trust. This builds on the principle we covered in our trustee surcharge guide: personal liability isn’t just about losing money — it’s about the breach itself.
What the Trustee Did
The trustee had access to a trust line of credit. Over several years, he drew down more than $261,000 and directed the funds to a family marijuana cultivation business. The money went to his wife, son, stepdaughter, and her husband.
The parties stipulated that the trust corpus suffered no actual loss. The line of credit was fully repaid.
The certified legal question was whether the surcharge should be limited to the trustee’s personal net gain — his “profit” — or whether it could reflect the full “benefit” conferred on him and his non-beneficiary family members.
The Court’s Answer: Benefit, Not Profit
The Orphans’ Court, affirmed by the Superior Court, held that the surcharge is not limited to the trustee’s personal net gain. The court’s reasoning drew from three sources:
Pennsylvania’s Uniform Trust Act, 20 Pa.C.S.A. § 7781(b)(3), authorizes the court to “compel the trustee to redress a breach of trust by paying money, restoring property or other means.” The Superior Court observed that this provision contains no language limiting recovery to “profit.”
The Uniform Trust Code’s Comment to § 1001 confirms that “the reference to payment of money in subsection (b)(3) includes liability that might be characterized as damages, restitution, or surcharge.” The drafters intended a broad remedy, not a narrow one.
The Restatement of Trusts, together with the Pennsylvania Supreme Court’s decision in In re Noonan’s Estate, 361 Pa. 26, 63 A.2d 80 (1949), recognizes that a fiduciary who prefers a third party over the beneficiary commits the same category of breach as one who pockets the money himself. As the Cameron court put it: “the trustee must neither (1) deal with trust property for the benefit of himself or third parties, nor (2) place himself in a position inconsistent with the interests of the trust.”
The Rule That Makes Good Faith Irrelevant
The court reiterated a principle that every trustee should understand: “The prohibition against self-dealing is absolute; where the trustee violates it, good faith or payment of a fair consideration is not material.”
A surcharge, the court explained, is “not as compensation for any loss to the estate, but as punishment for the fiduciary’s improper conduct.” This is the key distinction. If the surcharge were about compensating the trust for losses, repayment would matter. But because it’s about punishing the breach itself, repayment doesn’t touch the remedy.
What This Means for Trustees
The Cameron case reinforces several principles that every trustee should internalize:
Self-dealing is absolute. It doesn’t matter if you intended to repay. It doesn’t matter if you did repay. It doesn’t matter if the trust was better off after the transaction. If you used trust property for your own benefit or the benefit of third parties, you’ve breached your duty.
The surcharge measures benefit, not loss. Courts can look at what you and your family gained from the transaction, not just what the trust lost. In Cameron, that meant the full equity the family extracted from the marijuana business.
Family members aren’t exempt. The surcharge extended to benefits received by the trustee’s wife, son, stepdaughter, and her husband. None of them were beneficiaries. None of them were trustees. It didn’t matter. The trustee used trust property to benefit them, and the surcharge followed the benefit.
Good faith is not a defense to self-dealing. The court was explicit: good faith and fair consideration are not material when the prohibition is absolute. This is the hardest lesson for well-meaning trustees who borrowed “just for a few weeks” or “with every intention of paying it back.”
How Documentation Could Have Changed the Outcome
The Cameron trustee’s fundamental problem wasn’t the borrowing itself — it was that he used trust property for personal benefit without transparency, without beneficiary consent, and without court approval. Even if the transaction had been disclosed, self-dealing is presumptively a breach. But disclosure and consent can defeat a surcharge claim in some jurisdictions.
This is where TrustOffice’s governance platform becomes relevant. The platform forces trustees to document every transaction, flag potential conflicts of interest, and maintain an auditable record of decisions. In a surcharge proceeding, that documentation is the difference between a court seeing a deliberate, transparent process and a court seeing a trustee who treated the trust like a personal credit line.
The Cameron trustee had no documentation trail showing he disclosed the loans to beneficiaries or sought court approval. His defense relied on the fact that the money was repaid. The court rejected that defense entirely.
Practical Steps to Avoid a Cameron-Style Surcharge
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Never use trust property for personal benefit. This includes loans, investments in family businesses, and “temporary” borrowing. The prohibition is absolute.
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If you’re unsure whether a transaction is self-dealing, it probably is. Consult counsel before acting, not after. The cost of legal advice is trivial compared to a surcharge.
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Document every decision. If a transaction is defensible, the documentation should show why you made it, what alternatives you considered, and how it serves the beneficiaries’ interests.
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Disclose potential conflicts immediately. If you discover that a transaction might benefit you or a family member, notify the beneficiaries and seek court approval if necessary.
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Use governance tools that enforce transparency. TrustOffice’s platform requires trustees to log decisions, flag conflicts, and maintain audit trails. That infrastructure prevents the kind of undocumented self-dealing that led to the Cameron surcharge. For more on how documentation protects trustees, see our guide on why most trust meeting minutes wouldn’t survive an audit.
FAQ
What is the Cameron case about?
In re Will of Cameron, 335 A.3d 760 (Pa. Super. 2025), is a Pennsylvania Superior Court decision where a trustee borrowed from the trust to fund a family business. Even though every dollar was repaid, the court surcharged the trustee for the full financial benefit to his family members, not just his personal gain.
Can a trustee be surcharged if the trust suffered no loss?
Yes. The Cameron court held that a surcharge is “not as compensation for any loss to the estate, but as punishment for the fiduciary’s improper conduct.” Repayment doesn’t eliminate the breach.
Is good faith a defense to self-dealing?
No. The court reiterated that “the prohibition against self-dealing is absolute; where the trustee violates it, good faith or payment of a fair consideration is not material.”
Can a surcharge include benefits to family members?
Yes. The Cameron surcharge included the full financial benefit to the trustee’s wife, son, stepdaughter, and her husband, including equity they extracted from the family business funded by the trust loans.
What should a trustee do to avoid a surcharge?
Never use trust property for personal benefit, document every decision, disclose potential conflicts, consult counsel before transactions that might involve self-dealing, and use governance tools that enforce transparency.
How does TrustOffice help prevent self-dealing?
TrustOffice’s platform requires trustees to log every transaction, flag potential conflicts of interest, and maintain audit-ready records. In a surcharge proceeding, that documentation demonstrates transparency and proper process.
What’s the difference between profit and benefit in a surcharge?
Profit is the trustee’s personal net gain. Benefit is the total financial advantage conferred on the trustee and related parties. The Cameron court used benefit, not profit, as the measure — making the surcharge significantly larger.
Does repaying the trust prevent a surcharge?
No. The Cameron trustee repaid every dollar, and the trust suffered no loss. The court surcharged him anyway because the breach was the self-dealing itself, not the financial harm to the trust.
