In this segment of our series on Texas trust disputes, we shine a spotlight on the duties of trustees. Previously, we identified the rights of Texas trust beneficiaries. This post reveals another source of trust disputes—what happens when a Texas trustee breaches his or her duties.
Trustees owe legal duties to the trust and to the beneficiaries. In fact, trustees have some of the strictest, most extensive duties in any legal relationship. Those duties extend beyond prohibitions against taking trust funds for themselves or otherwise abusing their power. If you are a trust beneficiary or a trustee, you should be aware of all duties of trustees.
Under Texas law, trustees are fiduciaries of the trust and the trust beneficiaries. The term fiduciary refers to a person in a powerful role who must use that power wisely for the benefit of someone else. Trustees, like all fiduciaries, must follow their fiduciary duties. There are many specific fiduciary duties, which impose some of the highest obligations under Texas law. If the trustee fails to follow those duties, the trustee may be liable for the legal claim breach of fiduciary duty, sometimes referred to as breach of trust.
Here are a few of the fiduciary duties that trustees must follow:
–Duty of Loyalty. The trustee must act with the utmost good faith for the benefit of the trust property and the trust beneficiaries. In other words, a trustee must always prioritize the trust and its beneficiaries over the trustee’s own personal interests.
–Duty of Disclosure. The trustee has a duty to disclose important information to the beneficiaries. For example, the trustee must tell the beneficiaries about their interest in the trust and its property. The amount and quality of information the trustee must disclose depends on the terms of the trust and other case-specific circumstances.
–Duty to Refrain from Self-Dealing. A trustee cannot use trust property for the trustee’s personal purposes. For example, trustees should avoid purchasing trust property for themselves, even if they believe they are making a fair deal.
–Duty to Preserve and Protect Trust Assets. A trustee must take precautions to protect trust property. For example, if a house is in the trust, then the trustee should purchase insurance for the house.
These are just some of the many duties that trustees have under Texas law. If you suspect that a trustee is breaching his or her duties, you should speak with a trust dispute lawyer. The lawyer can advise you on the best course of action. Depending on the severity of the trustee’s breaches, trust beneficiaries can ask a court to remove the trustee, file a lawsuit against the trustee, and file for emergency relief like a temporary restraining order to protect trust property.
The Johnson Firm’s attorneys stand ready to assist with any Texas trust disputes. We have extensive experience responding to trust violations in North Texas, Central Texas, West Texas, East Texas, and South Texas. If you suspect that a potential trust dispute will affect you, please give us a call.