Blog

Trusts are designed to protect and manage assets for the benefit of designated individuals, known as beneficiaries. At the center of this arrangement is the trustee, whose role is to administer the trust according to its terms and in compliance with Texas law. 

Unfortunately, trustees do not always fulfill this duty as they should. When a trustee acts against the beneficiaries’ best interest, whether through negligence, mismanagement, or intentional misconduct, the consequences can be significant. 

At Ford + Bergner, LLP, our trust attorneys help beneficiaries hold trustees accountable and protect the assets they are entitled to receive. Call us today at (713) 260-3926!

Understanding the Trustee’s Fiduciary Duty

A trustee has a fiduciary duty to act in the best interest of the beneficiaries. This means they must:

• Follow the terms of the trust document.
• Manage trust assets prudently and avoid unnecessary risks.
• Keep accurate and complete records of trust transactions.
• Avoid conflicts of interest.
• Treat all beneficiaries fairly and impartially.

Texas law takes these duties seriously, and a trustee who fails to uphold them may be liable for breach of fiduciary duty.

Warning Signs a Trustee Is Failing in Their Duties

While some trustee misconduct is obvious, other warning signs may be more subtle. Beneficiaries should be alert for:

• Lack of communication — The trustee fails to provide updates or respond to reasonable requests for information.
• Missing or incomplete accountings — Trust law generally requires trustees to provide beneficiaries with periodic accountings of assets, income, and expenses.
• Unexplained losses or expenses — Large withdrawals, asset sales below market value, or unusual investments can indicate mismanagement.
• Favoritism — Treating certain beneficiaries more favorably than others without a valid reason.
• Self-dealing — Using trust assets for the trustee’s personal benefit or entering into transactions that create a conflict of interest.

If you notice any of these issues, it is essential to act quickly. Delays can make it harder to recover losses or prevent further harm.

Steps to Take When a Trustee Is Not Acting Properly

Review the Trust Document
The trust agreement outlines the trustee’s powers, duties, and limitations. Understanding these terms will help determine whether the trustee’s actions are within their authority or violate the trust’s provisions.

Request Information in Writing
Texas law allows beneficiaries to request information about trust administration. A written request for an accounting or explanation of specific actions creates a record and puts the trustee on notice that their conduct is being scrutinized.

Document All Concerns
Keep detailed notes of communications, missed deadlines, and any questionable transactions. This documentation can be critical if the matter proceeds to court.

Seek Legal Counsel Early
An experienced trust litigation attorney can evaluate whether the trustee has breached their duties and advise on the best course of action. In some cases, a strongly worded demand letter can prompt compliance without immediate litigation.

Consider Mediation
If possible, mediation can resolve disputes without a lengthy court battle. This approach may preserve family relationships and reduce costs.

Pursue Legal Action When Necessary
If the trustee refuses to correct their actions, beneficiaries may petition the court to compel an accounting, remove the trustee, or recover damages for losses caused by their misconduct.

Remedies Available Under Texas Law

Beneficiaries who prove that a trustee breached their fiduciary duties may be entitled to several remedies, including:

• Removal of the trustee — The court can appoint a replacement to protect the trust’s assets.
• Surcharge — The trustee may be ordered to repay losses or restore misappropriated funds.
• Injunctions — A court order can prevent the trustee from taking further harmful actions.
• Accounting — The trustee may be compelled to provide a complete and accurate record of trust activity.

In high-value trusts, these remedies are imperative to safeguarding assets and ensuring beneficiaries receive their rightful distributions.

Acting Quickly Is Critical

Texas imposes statutes of limitations on breach of fiduciary duty claims, which means waiting too long can forfeit your rights. Additionally, the longer a trustee mismanages a trust, the greater the risk that assets will be depleted or lost entirely. Beneficiaries should address concerns promptly to preserve both the value of the trust and their legal position.

How a Trust Lawyer from Ford + Bergner, LLP Can Help

Our Houston trust litigation attorneys have significant experience representing beneficiaries in disputes involving trustee misconduct. We:

• Analyze trust documents to identify violations.
• Demand accounting reports and investigate questionable transactions.
• Pursue removal and replacement of unfit trustees.
• Seek financial recovery for losses caused by mismanagement.
• Coordinate with financial and forensic experts to build strong cases.

Our goal is to protect your inheritance and ensure the trust is administered according to both the law and the grantor’s intent.

If you believe a trustee is not acting in your best interest, you do not have to face the situation alone. The attorneys at Ford + Bergner, LLP can help you understand your rights, gather the evidence you need, and take decisive action to protect your future. 

Call us at (713) 260-3926 or contact us online to schedule a consultation.