How Trust Litigation Works in Texas

A trust is a legal entity into which a person transfers his assets.  It is a way for him to avoid probate and reduce estate taxes upon his death. Trusts have beneficiaries, people or entities that benefit from the trust, and they have a trustee, a person or entity that administers and manages the trust.  Most trusts run fairly smoothly, but sometimes problems arise and result in trust litigation.

Under Texas law, a trustee, also known as a fiduciary, has specific duties.  These duties include being loyal to the beneficiaries, not delegating responsibilities, keeping accurate accounts, furnishing information to beneficiaries upon request, exercising reasonable skill and care, prudently managing trust assets, defending the trust against third-party claims, keeping trust funds separate from other money accounts and more. If a beneficiary feels that the trustee has failed in any of these duties, whether due to incompetence, fraud or other reasons, then he can take the trustee to court to recover damages.

Texas’ statute of limitations – the time frame in which the aggrieved party may file suit – is four years from the date that the aggrieved party claims that the trustee mismanaged the trust.  In some cases, the court can stop the statute of limitations from running to extend the time to file.

If a judge determines that the trustee has breached his fiduciary duty and harmed the beneficiaries, then the trustee is responsible for the difference between the benefits that the beneficiaries received from the trust and the benefits that they would have received if no breach had occurred.  The idea is to make the beneficiaries whole again.

Trust litigation is complex.  If you think you have a case, then contact us.  Our experienced, talented attorneys are here to assist. Our job is to protect your legal rights.

Trusts in the Law

A trust is an arrangement where the creator of the trust establishes a relationship with a third-party, or trustee, to manage assets or property for the benefit of another, called a beneficiary. Trusts are commonly established to pass an inheritance from parent to child, where the child is minor, financially immature, or has an intellectual disability.

The trustee is a fiduciary to the beneficiary, meaning that he or she must make decisions that are in the best interest of the beneficiary. The trustee may be compensated for performing this duty, however, the trustee is prohibited from certain actions that result in self-dealing. Self-dealing is a transaction executed by the trustee for his or her benefit, rather than for the benefit of the beneficiary; it violates the fiduciary duty of loyalty, or the duty to act in the best interest of the beneficiary.

Unfortunately, too often neither the creator nor the beneficiary (or beneficiaries) monitor the actions of the trustee, which results in the depletion of the trust. Often beneficiaries remain unaware of the self-dealing until they have little to no assets remaining for their care.

Once the self-dealing is discovered, both civil and criminal actions may be appropriate. Because trust law involves a long history of complicated case-law, the impacted beneficiary or his or her guardian should consult an experienced attorney in the area of trust law litigation.

If you have reason to believe that self-dealing has impacted the trust assets managed for the benefit of you or someone you know and need experienced counsel, please contact us for a consultation.

Beginning Of The Year Estate Planning: Does Your Estate Plan Reflect Your Life’s Circumstances?

The year is over, and this is a perfect time to take out your estate planning documents and review them. It is especially important to review your estate planning documents if any major changes have occurred this year. Did you get married this year? Did you get a divorce? Did you have a child or grandchild?

Is Your Estate Plan Updated?

Your estate planning document is not just something you fill out one time and forget about it. Your estate plan needs to accurately reflect your family’s needs and circumstances. If your estate plan has not been updated in years, it could be a disaster for your family. An outdated estate plan could be much worse than you not having an estate plan at all.

Sometimes people forget to update their estate planning documents to reflect what is going on at that time. If your estate planning documents are no longer accurate and you forget to update the documents, your final wishes will not be reflected in your estate planning documents.

Is Your Family Aware of Your Assets?

When family members are not aware of assets and properties that have been left to them, a large percentage of the estate will go away because no one ever claimed those assets or properties. This is one of the reasons why it is so important to make sure you leave your loved ones a list of things that you own. Not only should you leave a list of your assets and properties, you should also inform your loved ones of where those assets are located.

If you need to discuss your estate plan with an experienced attorney, contact us today.

What Should You Do Before Sending A Will To Probate?

Before anyone can take a will to probate, there are many things that have to be done. One of the most important things you will need to do is find out who the beneficiary is in the will.

You should also find out what type of properties and assets the person owned and if the loved one left any debts. Once you find all the properties and assets your loved one own, you should make a list of everything.

For all the properties and assets your loved one own, you should list the following information:

  • Who is the legal owner of the property?
  • Did your loved one own all the property or only part of it?
  • How much is your loved one’s property worth? How much will someone be willing to pay for the property today?

If your loved one left unpaid bills and other debts, you should make a list of all the debts your loved one owed. Many people leave behind a large number of bills including credit card bills, student loans, medical bills, etc. If you are able to find the unpaid accounts, you should try to make a full list of everything.

If there are multiple people listed as beneficiaries in the will and the properties, you should know the following information for everyone:

  • Name
  • Address
  • Contact number
  • Date of birth

If your loved one’s will was not recently updated and one of the beneficiaries is deceased, you will need to obtain a death certificate before taking the will to probate. There are several things that need to be completed before a will can be probated.

For more information, do not hesitate to contact us today.