A recurring scenario in trust litigation goes something like this: a trustee — often an adult child serving over a parent’s trust — uses the trust’s assets not to enrich himself directly, but to funnel money and opportunity to his spouse, his stepchildren, a side business, or a family LLC. When the beneficiaries discover it and sue, the trustee’s defense is predictable: “The trust didn’t lose money. Every dollar was repaid. There’s nothing to surcharge.”
The Pennsylvania Superior Court rejected exactly that defense in In re Will of Cameron, 335 A.3d 760 (Pa. Super. 2025), decided April 9, 2025. The court held that when a trustee engages in self-dealing, the surcharge can equal the total financial benefit received by the trustee and by the trustee’s non-beneficiary family members — even if the trust corpus itself suffered no monetary loss. While Cameron is a Pennsylvania decision, its reasoning rests on the Uniform Trust Code and the Restatement (Third) of Trusts, both of which are at the core of Ohio’s and Florida’s trust statutes. Beneficiaries in both states — and the practitioners who represent them — should pay attention.
What the Trustee Did
William R. Cameron, Jr. died in 1994, leaving behind two trusts: a revocable family trust and a testamentary credit trust. His son, William III, served as trustee of both. After the father’s death, the credit trust existed solely for the benefit of the mother during her lifetime; upon her death in 2019, both trusts were to terminate and distribute equally among the four children.
During his administration, the trustee opened a Morgan Stanley line of credit secured by trust assets. Over several years, he drew down more than $261,000 on that line and directed the funds to:
- His own and his wife’s personal federal and state income taxes;
- Tuition at Temple University for his son;
- Solar panels at a 5-and-10 store owned by the trustee and his wife through an LLC;
- Repayment of a business line of credit for that same store;
- Startup capital for ISM, LLC — a Colorado marijuana business operated by the trustee’s stepdaughter and her husband.
That last investment turned out to be lucrative. Venture capital later valued the marijuana business at more than $5 million, and the trustee and his wife acquired equity in a successor entity “without providing any funds … other than the funds [they] provided to startup ISM LLC in 2013.” None of the recipients of these disbursements — wife, stepdaughter, son-in-law, son — were beneficiaries of either trust.
The parties stipulated that the trust corpus suffered no actual loss: the line of credit was repaid. The certified legal question was whether the surcharge against the trustee was limited to the “profit” (net gain) he received personally, or whether it could instead reflect the full “benefit” conferred on him and his non-beneficiary family members.
The Court’s Answer: “Benefit,” Not Just “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:
The plain language of the statute. Pennsylvania’s Uniform Trust Act, 20 Pa.C.S.A. § 7781(b)(3), authorizes the court to “[c]ompel 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.” And the Uniform Law Comment to § 1001 of the Uniform Trust Code — the model on which § 7781 is based — confirms that “[t]he reference to payment of money in subsection (b)(3) includes liability that might be characterized as damages, restitution, or surcharge.”
The absolute nature of the self-dealing prohibition. Drawing on a long line of Pennsylvania authority, the court reiterated that “[t]he prohibition against self-dealing is absolute; where the trustee violates it, good faith or payment of a fair consideration is not material.” Self-dealing is an independent injury to the beneficiary’s equitable interest, actionable regardless of whether the corpus is diminished. A surcharge, the court explained, is “not as compensation for any loss to the estate, but as punishment for the fiduciary’s improper conduct.”
The Restatement (Third) of Trusts. Section 100(b) provides that a breaching trustee is chargeable with “the amount of any benefit to the trustee personally as a result of the breach” — a formulation broader than “profit.” Crucially, the Restatement’s commentary, 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 result: a surcharge measured by the full benefit to the trustee, his wife, his son, his stepdaughter, and her husband — including the value of equity they ultimately extracted from the marijuana business — was within the court’s authority to impose.
Why This Matters in Ohio
Ohio enacted the Uniform Trust Code effective January 1, 2007, and codified the remedies for breach of trust at R.C. 5810.01. The language is materially identical to Pennsylvania’s. R.C. 5810.01(B)(3) authorizes a court to “[c]ompel the trustee to redress a breach of trust by paying money, restoring property, or other means.” The companion damages provision, R.C. 5810.02(A), makes the trustee liable for the greater of (1) the amount required to restore the trust and its distributions to the position they would have occupied absent the breach, or (2) the profit the trustee made by reason of the breach.
Two observations follow. First, the R.C. 5810.01 remedial catalog is not textually limited to “profit”; it is the same broad “any appropriate relief” framework the Cameron court interpreted. Second, while R.C. 5810.02 does use the word “profit,” Ohio courts applying it must read it alongside R.C. 5810.01 and — per the UTC’s official comments — in light of the common law of trusts and principles of equity, which have long recognized that benefits conferred on third parties at the trust’s expense are within the surcharge remedy. Ohio’s own appellate decisions have repeatedly described trustee loyalty as a strict, non-waivable duty, and nothing in the Ohio Trust Code’s text or structure forecloses the Cameron reading.
For beneficiaries in Northeast Ohio — in Cuyahoga, Lake, Lorain, and surrounding counties — Cameron offers persuasive, well-reasoned authority to defeat the “no loss, no surcharge” defense. It is particularly useful in the common fact patterns this firm sees: a sibling-trustee who diverts funds to a business owned with a spouse; a trustee who uses trust property to secure loans that benefit his own children; a trustee who channels trust opportunities into an LLC formed with non-beneficiaries.
Why This Matters in Florida
Florida’s Trust Code, enacted in 2006, tracks the UTC closely. Section 736.1001(2)(c), Florida Statutes, provides the same “paying money or restoring property or by other means” remedy language. Section 736.1002(1) parallels Ohio’s damages measure: the greater of restoration or the profit the trustee made by reason of the breach.
Florida, however, has an especially robust body of case law on undue influence, elder exploitation, and trustee self-dealing. Florida courts have repeatedly emphasized that a trustee’s duty of loyalty is absolute and that the prohibition on self-dealing does not require proof of actual loss. Cameron’s holding — that “benefit” captures what “profit” does not — aligns with Florida’s equitable tradition and offers additional out-of-state support when briefing a surcharge motion under § 736.1001 or § 736.1002. As with Ohio, the textual anchor is the same: the remedies provision authorizes the court to compel the trustee to “pay money … or [use] other means” to redress the breach, and the statutory reference to “profit” in the damages provision does not trump the equitable breadth of the remedies provision itself.
Practical Takeaways for Beneficiaries and Their Counsel
Three points are worth underscoring for beneficiaries considering litigation:
First, the “no harm to the trust” defense is weaker than trustees tend to believe. Under both Ohio and Florida law, and now with persuasive authority from Pennsylvania, a trustee who uses trust property — or a credit line secured by trust property — to enrich his own family can be surcharged even where every dollar is ultimately returned to the trust.
Second, the remedy extends to benefits conferred on non-beneficiaries. A trustee cannot insulate his conduct by routing benefits through a spouse, stepchild, or affiliated LLC. The surcharge measures what the trustee caused to be transferred, not merely what ended up in his own pocket.
Third, the factfinder’s task is to quantify benefit, and Cameron rejects the argument that this is too difficult to undertake. Equity courts have always grappled with valuation questions, and — as the Pennsylvania court observed — any measurement difficulty is outweighed by the need to deter self-dealing in the first place.
If you are a beneficiary of an Ohio or Florida trust and you suspect the trustee has used trust assets, trust-secured credit, or trust opportunities to benefit himself or members of his family, the “no loss” defense should not end the inquiry. A careful forensic accounting, coupled with the remedies available under R.C. 5810.01 and 5810.02 in Ohio or §§ 736.1001 and 736.1002 in Florida, can frequently yield a substantial surcharge — measured not by what was taken from the trust, but by the full value of what the trustee caused to be conferred on himself and those close to him.
Daniel McGowan is a Cleveland, Ohio attorney focused on probate litigation, trust disputes, breach of fiduciary duty, and will contests throughout Northeast Ohio, and represents beneficiaries in trust and estate litigation Pennsylvania and also in Florida through Adrian Philip Thomas, P.A. This post is for general informational purposes and does not constitute legal advice. Each trust dispute turns on its specific facts and governing instruments; readers should consult qualified counsel regarding their particular situation.