Our last post highlighted certain misdeeds that trust information may reveal. Well then, what can you do about it? Texas law provides several tools to right the wrongs committed by trustees. We highly recommend that you speak with a Texas trust lawyer to discuss the options below, as each comes with nuanced risks and rewards that vary depending on your situation. For example, trustees may be able to use trust funds to defend themselves in legal proceedings. Our series on trust disputes covers this and more.
–Demand letter. Assertive trust attorneys often rely on demand letters as a prerequisite to further legal actions. In these letters, the trust attorney can inform the trustee of prior misdeeds, warn the trustee about future misconduct, and make specific demands on the trustee—for example, that the trustee return a vehicle to the trust, immediately insure valuable trust property, or even step down as trustee entirely. Some trustees will stop in their tracks when they know they’re being watched. If the trustee refuses your lawyer’s demands, then the options below may be necessary.
–Injunctive relief. If trust property is in extreme, immediate danger, you may be able to obtain injunctive relief from a court. When a court issues injunctive relief, the judge can order a trustee to refrain from committing a bad act or compel the trustee to undo an improper transaction. There are numerous legal requirements to obtain this relief. But if successful, a beneficiary can achieve an important result in a short amount of time.
–Removal of trustee. Sometimes the trustee has passed the point of no return. Regardless of the trustee’s corrections, apologies, and promises, the trustee simply cannot be trusted to act properly in the future. Texas beneficiaries may wish to request that a court strip the trustee of his or her trust powers and remove him or her from that position. Be careful taking this approach, because the trust agreement may appoint a successor trustee who is even less trustworthy than the first one!
–Lawsuit for damages. Trust attorneys can capitalize on the trust information you obtained and use it as the basis of a lawsuit against the trustee. These lawsuits often rely on the claim breach of fiduciary duty and ask the court to enter a judgment against the trustee to compensate the beneficiary or the trust for the harm that the trustee caused. Our prior series on trust disputes discussed examples of trustee breaches of fiduciary duty.
As you can see, Texas beneficiaries have several powerful ways to correct the wrongs done to them or to their trust. None of these actions should be taken lightly. But in the appropriate circumstance, assertive legal action may be the beneficiary’s only effective option. Moving on, our next post wraps up this series on beneficiaries’ rights to trust information and recaps important takeaways for beneficiaries in Texas.
We encourage you to contact us today if you found or suspect that your trustee has committed misconduct. Our Texas probate attorneys are experienced in using trust information to pursue legal action against trustees. Please contact us today if you have questions about trustee misconduct in North Texas, Central Texas, West Texas, East Texas, and South Texas. Our offices also serve Plano, Frisco, McKinney, Denton, Fort Worth, Garland, Irving, Austin, Houston, San Antonio, Nacogdoches, Lufkin, and Center.