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What happens when a trustee breaches their fiduciary duties?

On Behalf of | Oct 14, 2021 | Estate planning |

A Texas fiduciary takes care of the administration of the assets within a trust. If you are a trust beneficiary and the administrator acts inappropriately or fails to perform their duties, you may have grounds for a claim.

According to the State of Texas, trust administrators have a broad range of stated and implied powers. They can take action regarding the sale of property, investment of assets and payment of expenses.

Fiduciary duties

A trustee must perform fiduciary duties required by common law, which fall into four primary categories.

  • Duty of competence – The trustee must administer the trust using skill and prudence. These actions include those that a capable, ordinary person would use in all aspects of administration
  • Duty of full disclosure – The trust administrator must provide full and accurate disclosure of all material facts. This allows beneficiaries to protect their interests.
  • Duty of loyalty – The fiduciary must place your interests above his own.
  • Duty to reasonably exercise discretion – The trustee must act impartially, based on what is fair and reasonable for all beneficiaries.

Regardless of the language used in the trust, the court may review the fiduciary’s actions.

Remedies for breach of fiduciary duties

The court might have several options available to it regarding the breach of fiduciary duties. These options include compelling the trustee to perform their duties, seeking compensation for the breach of trust, and suspending the fiduciary.

Understanding the trust administrator’s duties is critical for proving a breach. You might decide to pursue a claim against the trustee for the benefit of the trust. In these cases, the court pays the trust any recovery amount. If you file a lawsuit against the trustee, it may be in his representative capacity, individual capacity or both. As a beneficiary, you may file a claim and have grounds to recover the amount due to you.