Which action is not permissible for a trustee under the self-dealing rules?

The self-dealing rules are designed to prevent trustees from engaging in transactions that would benefit themselves at the expense of the trust and its beneficiaries. When evaluating the actions a trustee can take, it becomes clear that borrowing from the trust for personal reasons falls squarely into the category of self-dealing. This action compromises the trustee’s fiduciary duty, as it places the trustee’s personal financial interests above those of the beneficiaries, potentially jeopardizing the trust's assets for personal gain.

In contrast, receiving compensation for services rendered is generally permissible provided it aligns with the terms of the trust and any applicable laws. Proper compensation acknowledges the effort and time the trustee commits to managing the trust.

Investing in safe securities is also a responsible trustee action, as it reflects a duty to preserve and protect trust assets while striving for reasonable returns. Engaging a financial advisor can also be in the best interest of the trust, especially when a trustee lacks expertise in investment decisions.

These permissible actions are aligned with the trustee's obligation to act in the best interest of the trust and its beneficiaries, making the act of borrowing from the trust for personal reasons a clear violation of self-dealing rules.