                            In the

United States Court of Appeals
              For the Seventh Circuit

Nos. 11-2781 & 11-3437

B RIAN F RENCH, D AVID F RENCH, JEANNA F RENCH,
and P AULA F RENCH V AN A KKEREN,
                                     Plaintiffs-Appellants,
                            v.

W ACHOVIA B ANK, N.A.,
                                              Defendant-Appellee.


           Appeals from the United States District Court
              for the Eastern District of Wisconsin.
            No. 06-C-869—Rudolph T. Randa, Judge.



        A RGUED JUNE 6, 2012—D ECIDED JULY 17, 2013




  Before E ASTERBROOK, Chief Judge, and W OOD and SYKES,
Circuit Judges.
  S YKES, Circuit Judge. This case raises questions about
the duties of loyalty and prudence in the law of trusts.
Jim French founded a successful manufacturing firm
in 1968 and later sold it for a handsome sum. As part
of his estate plan, French executed two interlocking
irrevocable trusts to benefit his four children upon his
2                                      Nos. 11-2781 & 11-3437

death. In 2004 he decided that his trust company was
not meeting his investment goals and moved the
accounts to Wachovia Bank, N.A.
  Among the underperforming investments in the trust
portfolio were two whole life insurance policies. After
months of evaluation and consultation with French and
his lawyers, Wachovia replaced the old policies with
new ones providing the same death benefit for sig-
nificantly lower premiums. This transaction yielded
a hefty but industry-standard commission for Wachovia’s
insurance-brokerage affiliate. The trust beneficiaries—
French’s adult children—were taken aback by the size
of the commission and sued Wachovia for breach of
fiduciary duty.
  Their primary claim alleges self-dealing. The Frenches
contend that Wachovia breached its duty of loyalty by
reinvesting trust assets through its insurance affiliate,
resulting in a large commission. On cross-motions for
summary judgment, the district court rejected this
claim, relying on an express conflict-of-interest waiver
in the trust document. The court also held that the trans-
action was neither imprudent nor undertaken in bad
faith. The court entered summary judgment for Wachovia
and ordered the Frenches personally to pay the bank’s
costs and attorney’s fees.
  We affirm. Under the terms of the trust instrument,
Wachovia had broad discretion to invest trust property
without regard to conflicts of interest, risk, lack of diversifi-
cation, or unproductivity. This language overrides
the common-law prohibition against self-dealing and
Nos. 11-2781 & 11-3437                                          3

displaces the prudent-investor rule. The duty to ad-
minister the trust in good faith always remains, but
there is no evidence that the bank acted in bad faith.
Finally, because Wachovia acted in good faith, the
award of attorney’s fees is proper under Wisconsin
trust law.


                        I. Background
  In 1968 French founded the J.L. French Company, a
manufacturing firm located in Sheboygan, Wisconsin.
The company made component parts for small engines
and was very successful. In 1996 French sold the business
for approximately $200 million. He and his late wife’s
estate owned most of the stock, and his four chil-
dren—Brian, David, Jeanna, and Paula (Van Akkeren)—
held the rest, so the sale made the French family very
wealthy.1
  Kathy Gray, an attorney and partner at the Milwaukee
law firm of Quarles & Brady, LLP, advised the French
family on estate-planning matters. In 1991 French con-
sulted her about establishing a trust to benefit his
children upon his death. Pursuant to his instructions, Gray
prepared and French executed a set of trust documents
creating two interlocking irrevocable trusts structured
as follows: (1) The assets in Trust #1 distribute in equal



1
  More specifically, the sale netted Jim French more than
$100 million, individually and through his late wife’s estate, and
each of the French children realized more than $17 million.
4                                  Nos. 11-2781 & 11-3437

shares to French’s children upon his death but the trust
pays no distributions during his lifetime; and (2) Trust #2
pays income to Trust #1 on an annual basis and will
distribute its assets to Trust #1 on French’s death.
  As of 2004, when our story begins, Trust #2 held
mostly stocks and bonds and was valued at approxi-
mately $24 million; Trust #1 was valued at more than
$5 million, not counting the death-benefit value of the
two life-insurance policies at the heart of this dispute.
Only Trust #1 is relevant here, so from now on we will
refer to a single trust even though there are two.
  French initially placed the trust in the care of a
Sheboygan attorney but over time lost confidence in
the attorney’s stewardship and moved the trust to First
Bank. He later moved the trust again, this time to the
Northern Trust Company. By 2004 French had grown
dissatisfied with Northern Trust’s conservative invest-
ment philosophy and modest rate of return. Of
particular concern were two life-insurance policies in
the trust’s portfolio. The policies—one issued by Pacific
Life and the other by Prudential Life—had a death
benefit of $5 million each. To maintain that benefit, how-
ever, the trust had to pay increasingly steep premiums.
In 2004 the annual premium for the Pacific Life policy
was $164,000, and the premium for the Prudential
policy was scheduled to jump by more than $40,000.
  So French began to look for a new trustee with a better
investment strategy. His daughter Paula urged him to
talk to her stockbroker at Wachovia Securities about
moving the trust to Wachovia Bank. In early 2004 French
Nos. 11-2781 & 11-3437                                  5

held an initial meeting with Fred Church, a Wachovia vice
president, at French’s vacation home in Naples, Florida.
Gray, the French family’s attorney, was also present.
At French’s request Church and his associate, Steve
Schumacher of Wachovia Insurance Services, commenced
an evaluation of the trust portfolio to identify potential
areas for improved profitability. In late May Gray sent
Wachovia information about the two insurance policies
held by the trust. On July 22 Church wrote to Gray con-
firming Wachovia’s willingness to take over as trustee
and identifying options to improve the trust’s insurance
assets. On August 3 Gray and her partner John Bannen,
an insurance specialist at Quarles & Brady, met with
Church in Milwaukee to discuss the range of options.
Because of a communication snafu, however, French
did not have adequate notice and could not attend the
meeting. He was upset and remained so even after
Bannen summarized the meeting in a detailed memoran-
dum.
  In September French instructed Gray to discontinue
the insurance analysis, so for a time Bannen and Church
did nothing further. In mid-October Church received
word from Gray that French wanted to retain Wachovia
as trustee after all. After some delay on Northern
Trust’s end, Wachovia took over as trustee effective
December 29, 2004.
  This revived the earlier discussion about life-insurance
options. French directed Church to find a better deal
and provided the necessary personal and medical infor-
mation for Wachovia to shop around for quotes.
6                                  Nos. 11-2781 & 11-3437

Working with Bannen, Church and Schumacher identified
several possibilities, which Bannen summarized in a
memo to French dated March 31, 2005. One proposal
was to switch to new no-lapse life-insurance policies
issued by John Hancock Life; these policies guaranteed
the same death benefit but at a much lower premium.
In the memo Bannen highlighted the pros and cons of the
proposed swap. Most importantly, the trust would get
the same insurance for far less money. The lower, fixed
premiums for the two John Hancock policies—estimated
savings: $620,000—would purchase the same $5 million
per policy death benefit as the Pacific Life and
Prudential policies. The no-lapse guarantee ensured
that the contracts would pay the promised death benefit
as long as the premiums were paid.
  On the other hand, the trust would lose the flexibility
of the Pacific Life and Prudential policies, which accumu-
lated cash value that could be recouped if the policies
were surrendered before French’s death. But Bannen
and Church could not foresee any scenario under
which early surrender would be necessary or desirable.
The trust had significant assets and was well diversified,
made no distributions during French’s lifetime, and the
beneficiaries were already very wealthy. Church deemed
the loss of flexibility unimportant to the overall goals of
the trust. The main point of having life insurance in
the investment mix was to reap the death benefit, not
the cash surrender value, which would never exceed the
death benefit in any event.
  Church and Schumacher met with French on March 31
to discuss these options; Bannen participated by phone.
Nos. 11-2781 & 11-3437                                   7

When the meeting ended, Schumacher gave French
two blank John Hancock policy applications to take
with him. The following week French signed the applica-
tions in blank and returned them to Wachovia In-
surance, and Schumacher’s assistant filled in the neces-
sary information. On April 12 the managing director
of Wachovia’s Trust Department signed the applications
and also executed the required IRS forms documenting
the exchange. Schumacher submitted the applications
to John Hancock but held back on authorizing the sur-
render of the Pacific Life and Prudential policies
pending final approval from French. The new John Han-
cock policies issued at the end of the month.
   In the meantime, Church sent Gray a proposed con-
flicts waiver identifying Wachovia Insurance Services,
an affiliate of Wachovia Bank, as the broker for the insur-
ance exchange, and also disclosing that Wachovia In-
surance would receive a commission on the transaction.
This prompted a new round of discussions between
Gray and Church about the possibility of rebating the
commission, or alternatively, commensurate fee conces-
sions by the trustee. Neither was legally permissible.
French balked at the terms of the conflicts waiver, which
included a broad release of “any claim” arising out of
Wachovia’s purchase of new insurance on behalf of the
trust. He refused to sign.
  But as trustee Wachovia did not need French’s authoriza-
tion to proceed with the exchange, and the bank ulti-
mately concluded that it did not need the conflicts
waiver either. After consulting legal counsel and re-
8                                Nos. 11-2781 & 11-3437

viewing the terms of the trust instrument, Church
notified Gray that Wachovia was withdrawing its
request that French sign the conflicts waiver. On May 18
the transaction proceeded as planned. On behalf of
the trust, Wachovia surrendered the Pacific Life and
Prudential policies. Wachovia Insurance received a com-
mission of $512,000 from the redeemed cash value of
the policies, plus 2% of the annual premiums for the
new policies for the next ten years. No one disputes
that this commission, though sizable, is consistent with
industry standards.
  Over the summer of 2005, French and his children,
through counsel, complained to Wachovia about the
process surrounding the insurance exchange. In the fall
the family retained a different Milwaukee law firm, and
on November 4 the new lawyers asked Wachovia to
reverse the transaction. By then it was too late to
unwind the swap. After another change of counsel, the
French children as trust beneficiaries sued Wachovia in
Sheboygan County Circuit Court for breach of fiduciary
duty. Wachovia removed the suit to federal court based
on diversity of citizenship. See 28 U.S.C. § 1332. An
initial skirmish over arbitration precipitated an unsuc-
cessful interlocutory appeal by Wachovia. See French
v. Wachovia Bank, N.A., 574 F.3d 830 (7th Cir. 2009).
  Once the case was back in the district court, dis-
covery proceeded and both sides eventually moved for
summary judgment. Wachovia sought judgment in its
favor on all claims, and the beneficiaries asked for
partial summary judgment on the limited issue of dis-
Nos. 11-2781 & 11-3437                                     9

gorgement of the $512,000 commission. See French v.
Wachovia Bank, N.A., 800 F. Supp. 2d 975, 978 (E.D. Wis.
2011). In a comprehensive decision and order, the
district court granted Wachovia’s motion, applying
Wisconsin law 2 and finding no support for the beneficia-
ries’ claim that the bank breached its fiduciary duties
of loyalty and prudence by engaging in self-dealing and
making an imprudent investment. See id. at 986-91.
Wachovia then requested and received an award of at-
torney’s fees and costs, payable by the beneficiaries
individually. This appeal followed.


                      II. Discussion
  The Frenches reprise their arguments that Wachovia
violated its fiduciary duty by engaging in self-dealing
and imprudently investing trust assets. Because the
case was resolved on summary judgment, we would
ordinarily review the district court’s ruling de novo,
construing all facts and drawing reasonable inferences
in the light most favorable to the nonmoving party, here
the Frenches. Righi v. SMC Corp., 632 F.3d 404, 408 (7th
Cir. 2011). But Wachovia urges us to apply the clear-
error standard of review because the claims are equitable


2
  The trust instrument provides that Wisconsin law applies.
See James L. French Irrevocable Trust of 1991 #1, Article VI,
App. of Pls.-Appellants 43 (“[T]he rights and duties of the
trustees and beneficiaries shall be construed and regulated
and their validity and effect shall be determined by the laws
of the State of Wisconsin.”).
10                                      Nos. 11-2781 & 11-3437

in nature and the beneficiaries are not entitled to a
jury trial.3
  The bank relies on a line of authority arising under
the Employee Retirement Income Security Act (“ERISA”),
which (among other things) creates claims for various
forms of equitable relief not triable to a jury; we have
held that when the district court resolves an ERISA
claim on summary judgment and “’the only issue before
the . . . court is the characterization of undisputed sub-
sidiary facts,’” the clear-error standard of review applies.
Cent. States, Se. & Sw. Areas Pension Fund v. Nagy, 714
F.3d 545, 549 (7th Cir. 2013) (quoting Cent. States, Se. &
Sw. Areas Pension Fund v. Messina Prods., LLC, 706 F.3d



3
   In an underdeveloped argument, the Frenches maintain that
they are entitled to a jury trial. Because breach-of-trust claims
are equitable in nature, they are ordinarily resolved by the
court without a jury. See Jefferson Nat’l Bank v. Cent. Nat’l Bank,
700 F.2d 1143, 1149 (7th Cir. 1983); R ESTATEMENT (S ECOND ) OF
T RUSTS §§ 197, 198 (1959). In Jefferson National Bank, we noted
a difference between “a suit in equity to compel the trustee
to redress a breach of trust by placing a certain amount of
money back into the trust corpus” and “a suit for immediate
payment on an indebtedness arising out of a breach of trust,”
which may be brought at law. Jefferson Nat’l Bank, 700 F.2d
at 1149. This case does not fit within the limited exception
discussed in Jefferson National Bank. The Frenches contend
that Wachovia breached its fiduciary duty in the administra-
tion of trust assets and seek to have the alleged loss of trust
value restored. The case does not involve “a suit for immediate
payment on an indebtedness” to the trust. Id.
Nos. 11-2781 & 11-3437                                     11

874, 879 (7th Cir. 2013)); see also McDougall v. Pioneer
Ranch Ltd. P’ship, 494 F.3d 571, 575-76 (7th Cir. 2007); Cent.
States, Se. & Sw. Areas Pension Fund v. Fulkerson, 238
F.3d 891, 894 (7th Cir. 2001). In other words, where there
is no right to a jury trial and the subsidiary facts are
undisputed, a district court’s order granting summary
judgment presents a mixed question of law and fact and
is reviewed for clear error. Nagy, 714 F.3d at 549 (citing
Fulkerson, 238 F.3d at 894).
  This approach to the standard of review in ERISA
cases was first announced in Central States, Southeast &
Southwest Areas Pension Fund v. Slotky, 956 F.2d 1369, 1374
(7th Cir. 1992), and has been generally applied in
ERISA cases ever since. See Nagy, 714 F.3d at 549 (collecting
cases). Nothing in the logic of the rule limits it to that
context, however. To the contrary, the analogy makes
sense here because ERISA builds on the law of trusts.
See Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 110
(1989); White v. Marshall & Ilsley Corp., 714 F.3d 980, 986
n.4 (7th Cir. 2013) (“Trust law serves as the basis for
much of ERISA.”). Still, because it “alters normal
summary-judgment review,” the modified standard of
review “has sometimes been resisted.” Nagy, 714 F.3d at
549 n.1. On occasion we are asked to overrule Slotky, but
to date we have declined to revisit it. See id. (citing
Cent. States, Se. & Sw. Areas Pension Fund v. Neiman, 285
F.3d 587, 593 (7th Cir. 2002); Cent. States, Se. & Sw. Areas
Pension Fund v. White, 258 F.3d 636, 640 (7th Cir. 2001);
Fulkerson, 238 F.3d at 894)). We don’t need to wade into
the debate here because “[w]e would affirm under
12                                   Nos. 11-2781 & 11-3437

either standard.” Freda v. Comm’r, 656 F.3d 570, 573 (7th
Cir. 2011) (quotation marks omitted).


A. Breach of Fiduciary Duty
  The Frenches first argue that Wachovia breached its
fiduciary duty of loyalty by engaging in prohibited self-
dealing. Alternatively, they claim that the insurance
transaction violated the prudent-investor rule as codified
in Wisconsin via the Uniform Prudent Investor Act. See
W IS. S TAT. § 881.01. Finally, if the prudent-investor
rule does not apply, the Frenches contend that Wachovia
made the insurance swap in bad faith.
  “’It is a fundamental principle of the law of trusts
that the trustee is under a duty of undivided loyalty to
the beneficiaries of the trust.’” Hammes v. First Nat’l Bank
& Trust Co. of Racine, 255 N.W.2d 555, 561 (Wis. 1977)
(quoting Dick & Reuteman Co. v. Doherty Realty Co.,
114 N.W.2d 475, 478 (Wis. 1962)); see also Estate of Van
Epps v. City Bank of Portage, 161 N.W.2d 278, 282 (Wis.
1968); see generally R ESTATEMENT (T HIRD ) OF T RUSTS § 78
(2007). The duty of loyalty requires the fiduciary “’to act
solely for the benefit of the principal in all matters con-
nected with the agency, even at the expense of the
agent’s own interests.’” Zastrow v. Journal Commc’s, Inc.,
718 N.W.2d 51, 60 (Wis. 2006) (quoting Losee v. Marine Bank,
703 N.W.2d 751, 755 (Wis. Ct. App. 2005)); see also Praefke
v. Am. Enter. Life Ins. Co., 655 N.W.2d 456, 458-59 (Wis.
Ct. App. 2002).
  One aspect of the duty of loyalty is the strict prohibition
against self-dealing. See Praefke, 655 N.W.2d at 459; In re
Nos. 11-2781 & 11-3437                                     13

Estate of Ames, 448 N.W.2d 250, 252-53 (Wis. Ct. App.
1989); R ESTATEMENT (T HIRD ) OF T RUSTS § 78(2). This pro-
hibition applies whether or not the self-dealing results
in profits drawn from the trust itself or paid by a third
party. See R ESTATEMENT (T HIRD ) OF T RUSTS § 78 cmt. d(1)
(“A trustee engages in self-dealing and therefore
normally violates the duty of loyalty by personally ac-
cepting from a third person any fee, commission, or other
compensation for an act done by the trustee in connec-
tion with the administration of the trust.”).
  But the trust instrument may waive the general rule
and authorize the trustee to engage in transactions that
involve self-dealing. Welch v. Welch, 290 N.W. 758, 782
(Wis. 1940); R ESTATEMENT (T HIRD ) OF T RUSTS § 78 cmt. c(2).
General language granting broad powers to the trustee
is not sufficient to waive the prohibition; to be effective,
the authorization to self-deal must be express and clear.
See Alexopoulos v. Dakouras, 179 N.W.2d 836, 840 (Wis.
1970); Praefke, 655 N.W.2d at 459.
  Here, the trust instrument contains an express
conflicts waiver in the section of the document that de-
scribes the trustee’s powers and duties. In pertinent part,
that section provides:
    III. TRUSTEE
        (B) Powers and Duties
              (1) Without limiting powers incidental to the
            purposes of the trust or otherwise existing by
            law, the trustee and all successors shall have,
            without approval of any court, the power:
14                                   Nos. 11-2781 & 11-3437

            to retain, invest and reinvest in any property
            without regard to whether the same may
            be authorized by law, regardless of any
            risk, lack of diversification or unproductivity
            involved; . . . to continue as trustee and to deal
            with any trust hereunder without regard to con-
            flicts of interest; . . . and in general, without
            limitation by reason of the foregoing, to do
            any and every act and thing that the trustee
            would have the right to do as trustee under
            applicable common and statutory law or as
            the absolute owner of property provided
            that all powers shall be exercised exclusively
            in a fiduciary capacity.
James L. French Irrevocable Trust of 1991 #1, Article
III(B)(1), App. of Pls.-Appellants 40-41 (emphasis added).
  The italicized language is quite clear. As the district
court aptly put it, the clause “specifically allows the
trustee to deal ‘without regard to conflicts of interest.’ It
is hard to imagine how the authorization to self-deal
could be described more clearly.” French, 800 F. Supp. 2d
at 987. In an effort to escape this clarity, the Frenches
focus on the phrase “to continue as trustee and to deal
with any trust hereunder”; they claim that this language
restricts application of the conflicts waiver to newly
created trusts that come into being under the general
authority granted in the trust instrument. This strikes
us as a strained reading of the language. Read more
naturally, the clause “any trust hereunder” authorizes
the trustee to deal with both the current trust and any
Nos. 11-2781 & 11-3437                                   15

others later created “without regard to conflicts of in-
terest.” Stated more succinctly, “any trust hereunder”
naturally includes Trust #1 itself.
  The Frenches also point out that “self-dealing” and
“conflict of interest” are not synonymous terms. True, but
that doesn’t help their argument. Self-dealing is one
type of a conflict of interest. See R ESTATEMENT (T HIRD )
OF T RUSTS § 78 cmts. (d) & (e). The trust’s use of the
general term “conflicts of interest” necessarily includes
the more specific kind of conflict of interest that consists
of “self-dealing.” In other words, the trust language
broadly waives all conflicts of interest, including trans-
actions involving self-dealing.
  Finally, the Frenches rely on the provision in the trust
instrument instructing the trustee to administer the trust
in an “exclusively fiduciary capacity.” This provision
simply states the obvious—the trustee is a fiduciary. It
does not withdraw or defeat the conflicts waiver found
earlier in the document, which is both clear and specific.
In short, the trust instrument expressly authorized
Wachovia to proceed with the insurance transaction
even though its insurance affiliate would earn a commis-
sion.
  The Frenches next argue that the transaction was such a
bad investment that it amounted to a violation of the
bank’s duty of prudence. See generally R ESTATEMENT
(T HIRD ) OF T RUSTS § 77 (2007) (explaining a trustee’s
fiduciary duty of prudence). In Wisconsin, as in many
states, the common-law prudent-investor rule is codified
under the Uniform Prudent Investor Act. See W IS. S TAT.
16                                  Nos. 11-2781 & 11-3437

§ 881.01; see also R ESTATEMENT (T HIRD ) OF T RUSTS § 91
cmts. (b), (c) & (d) (2007) (discussing the widespread
codification of the common-law prudent-investor rule
via the Uniform Prudent Investor Act).
   The Act provides that a “fiduciary shall invest and
manage assets as a prudent investor would, by con-
sidering the purposes, terms, distribution requirements,
and other circumstances of the estate, trust, conservator-
ship, or guardianship. In satisfying this standard, the
fiduciary shall exercise reasonable care, skill, and cau-
tion.” W IS. S TAT. § 881.01(3)(a). The Act goes on to list
a variety of factors that a fiduciary “shall consider” in
making investment decisions, including “[g]eneral eco-
nomic conditions,” the “possible effect of inflation or
deflation,” the “expected tax consequences of investment
decisions,” the “expected total return from income and . .
. appreciation,” “liquidity” needs, “regularity of income,”
and the “[o]ther resources of the beneficiaries,” among
other factors. Id. § 881.01(3)(c).
  The district court assumed that the statute applied
and concluded that Wachovia had not violated it. The
Frenches attack this holding on appeal, and Wachovia,
needless to say, defends it. But the bank also raises an
important threshold question, one that the district court
chose not to address: Does the language of the trust
instrument override the prudent-investor rule? The
answer determines the applicable legal standard because
by its terms the Act establishes only a “default rule” that
“may be expanded, restricted, eliminated, or otherwise
altered by the provisions of a will, trust, or court order.”
Nos. 11-2781 & 11-3437                                        17

Id. § 881.01(2)(b); see also R ESTATEMENT (T HIRD ) OF T RUSTS
§ 91 cmts. (b) & (d).
  The section of the trust instrument that we block-
quoted earlier contains just such a contractual work-
around: “[T]he trustee . . . shall have . . . the power . . . to
retain, invest and reinvest in any property without regard
to whether the same may be authorized by law, regardless
of any risk, lack of diversification or unproductivity
involved . . . .” French Trust, supra, Article III(B)(1), App. of
Pls.-Appellants 40 (emphasis added). This language
displaces the prudent-investor rule.
  The trustee is always obligated to administer the trust
in good faith, however. See Estate of Koos v. Koos, 69
N.W.2d 598, 605-06 (Wis. 1955); Welch, 290 N.W. at 782; see
generally R ESTATEMENT (T HIRD ) OF T RUSTS § 96 (2012)
(explaining that exculpatory clauses in trust instruments
do not remove liability for breaches of trust committed
in bad faith). Because the prudent-investor rule does
not apply, we review the trustee’s action only for bad
faith. This brings us to the Frenches’ fallback bad-faith
argument, and here again we agree with the district
court; there is no evidence of bad faith. Indeed, all the
evidence points in the opposite direction: The insurance
exchange was undertaken in good faith, and indeed
Wachovia satisfied the higher standard of the Uniform
Prudent Investor Act, as the district court held. See
French, 800 F. Supp. 2d at 989-91.
  It is undisputed that the Pacific Life and Prudential
policies were expensive. To maintain the $5 million
death benefit, the annual premiums were very large and
18                                  Nos. 11-2781 & 11-3437

increasing. When French moved the trust account from
Northern Trust to Wachovia, he pressed the bank to save
money and grow the trust corpus. Exchanging the
Pacific Life and Prudential policies for the new, no-lapse
policies issued by John Hancock maintained the same
death benefit and saved $620,000 in premium costs.
Although the old policies accumulated cash surrender
value and the John Hancock policies did not, this loss
of flexibility was insignificant because the insurance
was held for its death benefit, not its cash value. In other
words, the trust did not need life-insurance cash value
as a tool; the trust was well diversified in other assets.
  By all accounts the insurance exchange made very
good business sense. The only possible reason to
maintain insurance that accumulated cash-redemption
value was to maintain greater flexibility. But absent
some reason to think that the redemption option would
be used (and none is offered), Wachovia’s decision
to reinvest in the new, less-expensive policies was emi-
nently reasonable and was certainly made in good faith.
That Wachovia’s insurance affiliate earned a substantial
commission does not amount to bad faith; the trust in-
strument permitted this kind of self-dealing, and the
insurance exchange was a “win-win” for both the trust
and the bank. See John H. Langbein, Questioning the Trust
Law Duty of Loyalty: Sole Interest or Best Interest?, 114
Y ALE L.J. 929, 980-89 (2005) (discussing transactions that
benefit both the trust and the trustee, especially in the
era of professional financial-services administrators).
  The Frenches insist that by initially seeking their
father’s consent and then going ahead with the exchange
Nos. 11-2781 & 11-3437                                    19

unilaterally, Wachovia acted in bad faith. This argument
is a nonstarter. Unless the trust instrument specifically
requires it, a trustee does not need the consent of the
settlor or the beneficiaries to make investment decisions
about trust assets. See R ESTATEMENT (T HIRD ) OF T RUSTS
§ 75 (2007); see also id. § 82(1)(c) cmt. d (2007). Here, the
trust instrument gave Wachovia total discretion to
“retain, invest and reinvest in any property.”
  The Frenches also argue that they were entitled to
know the exact size of the commission before the trans-
action was consummated. It is true that a trustee has a
duty to keep beneficiaries “reasonably informed of
changes involving the trusteeship and about other sig-
nificant developments concerning the trust and its ad-
ministration, particularly material information needed
by beneficiaries for the protection of their interests.”
R ESTATEMENT (T HIRD ) OF T RUSTS § 82(1)(c); see also
Zastrow, 718 N.W.2d at 60 (referring generally to a
trustee’s duty to disclose relevant information to bene-
ficiaries). Because the importance of any given action of
a trustee will vary by the terms, goals, and size of a
trust, there are no hard and fast rules to determine when
a development is sufficiently “significant” to trigger the
duty to notify beneficiaries. Rather, the trustee is
obligated to “exercise reasonable judgment in deter-
mining what matters have such significance.” R ESTATE-
MENT (T HIRD ) OF T RUSTS § 82(1)(c) cmt. (d). Generally
speaking, only “important adjustments being considered
in investment or other management strategies” need
be disclosed. Id.
20                                  Nos. 11-2781 & 11-3437

  This single transaction was not so significant that the
bank had a duty to provide detailed information about it
in advance; the exchange of one insurance policy for
another, while maintaining the identical death benefit, is
not a significant adjustment in investment strategy.
Regardless, Wachovia did, in fact, keep the Frenches in
the loop from start to finish. Jim French specifically
instructed Wachovia to look for other insurance op-
tions. The French family’s lawyers at Quarles & Brady
worked in tandem with Church and Schumacher over
many months to evaluate the proposed exchange. Jim
French signed the application forms and was kept in-
formed every step of the way, and the Frenches had
notice that Wachovia Insurance would earn a commis-
sion. Indeed, their lawyers negotiated before the fact for
a rebate or a reduction in Wachovia’s fees. The record
does not support a finding of fiduciary breach based
on Wachovia’s failure to give the beneficiaries advance
notice of the size of the commission.


B. Attorney’s Fees and Costs
  The Frenches also challenge the district court’s award
of attorney’s fees and costs. We “review the district
court’s award of attorney’s fees for abuse of discretion
and its legal analysis and methodology de novo.” Johnson
v. GDF, Inc., 668 F.3d 927, 931 (7th Cir. 2012). Under
Wisconsin law the trial court may shift a prevailing
trustee’s defense costs to the trust if the court finds that
the trustee acted honestly and in good faith. McGeoch Bldg.
Co. v. Dick & Reuteman Co., 40 N.W.2d 577, 579 (Wis. 1950);
In re Estate of Cole, 78 N.W. 402, 406 (Wis. 1899). Having
Nos. 11-2781 & 11-3437                                     21

found no evidence of bad faith, the district court held
that Wachovia was entitled to recover its attorney’s fees
and costs.
  Usually the fees and costs are paid from the corpus of
the trust, but here the district court ordered the
Frenches personally to pay. There is no dispute that the
court has the equitable power to do this. See Cleveland v.
Second Nat’l Bank & Trust Co., 149 F.2d 466, 469 (6th Cir.
1945); duPont v. S. Nat’l Bank of Hous., Tex., 771 F.2d 874,
885 (5th Cir. 1985); Brisacher v. Tracy-Collins Trust Co., 277
F.2d 519, 524 (10th Cir. 1960); see also Robert L. Rossi,
2 A TTORNEYS’ F EES § 11:63 (3d ed. 2011) (collecting cases).
The court held that the equities favored ordering the
beneficiaries to pay the trustee’s attorney’s fees and costs.
The successor trustee was not a party, and the court
concluded that requiring Wachovia to pursue its fees
award in a separate action against the new trustee would
needlessly “multiply costs and delay the inevitable.” The
court also noted that the successor trustee had agreed
to reimburse the Frenches for their own attorney’s fees.
Finally, the court observed that the Frenches “are of
substantial means” and “can determine the proper alloca-
tion of the . . . fee award amongst themselves and the
successor trustee.”
  This decision was entirely sensible. To attack it,
the Frenches simply rehash their merits arguments
about self-dealing and bad faith, which we have already
rejected. We find no abuse of discretion.
                                                  A FFIRMED.

                            7-17-13
