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.

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