Find Out About Removal of Trustees, Breach of Duty in Probate or Inheritance Disputes
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Texas courts recognize that a person with a power of attorney owes the principal (the person who gave the power of attorney) a fiduciary duty. The holder of the power of attorney owes her principal a high duty of good faith, fair dealing, honest performance, and strict accountability.
When the fiduciary receives an alleged gift from the principal, the fiduciary has an extremely high burden to show that the gift was in the best interest of the principal. The courts have observed that the fiduciary relationship cast upon the profiting fiduciary the burden of showing the fairness of the transactions. By accepting both the role of fiduciary and gifts from the principal, the agent consents to have her conduct measured by a higher standard of loyalty. In one case, the fiduciary never acted under her power of attorney. Therefore, she claimed, she did not have to meet the high burden of a fiduciary to prove that the gifts she received from the principal were in the best interest of the principal. The court rejected these arguments. The court found that the holder of the power of attorney owed the principal a fiduciary duty based solely on the power of attorney whether or not it was ever exercised. This finding placed the burden on the holder to prove the transfer of the principal's property to her was fair and in the best interest of the principal.
The violation of the duty that a holder of a power of attorney owes to the principal can result in a felony conviction. In one case, the facts were as follows: "Grace added Tyler as a signatory on her bank accounts, and executed a durable power of attorney naming Tyler as her "agent (attorney-in-fact)." The power of attorney gave Tyler power over all of Grace's assets." Tyler later misapplied the funds under her control by using some for her personal debts. The criminal law in question, §32.45 of the Texas Penal Code says: "A person commits an offense if he intentionally, knowingly, or recklessly misapplies property he holds as a fiduciary or property of a financial institution in a manner that involves substantial risk of loss to the owner of the property or to a person for whose benefit the property is held." Tyler claimed that she had no formal trustee relationship with Grace, and therefore a fiduciary relationship "may not have" existed. In ruling that the existence of the power of attorney alone created the fiduciary relationship, the court upheld her conviction.
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An executor or administrator, like a trustee has to account for the property that comes into his possession. The accounting obligations of a trustee are discussed here. This article will discuss the accounting obligations of an executor or an administrator in a probate matter. What is an accounting? An accounting is a written statement detailing the financial condition of the estate. It includes: - The property belonging to the estate which has come into his hands.
- The disposition that has been made of such property.
- The debts that have been paid.
- The debts and expenses, if any, still owing by the estate.
- The property of the estate, if any, still remaining in his hands. And,
- Such other facts as may be necessary to a full and definite understanding of the exact condition of the estate.
In all cases, when the fiduciary does not file an accounting, an interested party can demand an accounting. The Tex. Probate Code 149A says that an accounting can be demanded fifteen months after the executor has been appointed. If the executor or administrator does not file an accounting with 60 days after the demand, the Texas Probate Code provides that an interested party can file suit against the fiduciary to compel the accounting.
If you are dealing with an executor, administrator or trustee and you are not receiving regular updates about the financial condition of the property under his control, you probably need to contact an attorney about your rights before the estate is squandered away.
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 One of the primary duties of a trustee is to keep full, accurate and orderly records concerning the status of the trust estate and all acts performed by him. He is charged with maintaining an accurate account of all the transactions relating to the trust property. Some states require a formal written accounting by the trustee on an annual basis, but Texas does not. Texas does have a provision that beneficiary or "interested person" can demand that the trustee give a written accounting of the trust. The Tex. Prop. code 113.151 defines the right to an accounting from trustees or other fiduciaries subject to the Trust Code. The trustee must make the written accounting within 90 days. If he does not, the court can order him to make an accounting and two personally pay the attorneys fees and costs for not making the requested accounting.
the written accounting by the trustee must show:
- all trust property that has come to the trustee's knowledge or into the trustee's possession and that has not been previously listed or inventoried as property of the trust;
- a complete account of receipts, disbursements, and other transactions regarding the trust property for the period covered by the account, including their source and nature, with receipts of principal and income shown separately;
- a listing of all property being administered, with an adequate description of each asset;
- the cash balance on hand in the name and location of the depository where the balance is kept; and
- all known liabilities owed by the trust.
Many times, people are beneficiaries of property that is being controlled by someone else but can't get any information about the status of the property. If you are not getting regular updates about the financial condition of your property in the hands of a fiduciary whether that fiduciary is an executor, administrator or a trustee, you probably need to contact an attorney before the estate is squandered.
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 A fiduciary can be removed because of gross mismanagement.
In a recent case, an attorney was appointed as the Independent Executor of his great uncle's estate. He was not a beneficiary under the will. He hired himself to be the attorney for the estate. The will did not provide for the attorney to receive a fee for his services. The Inventory and Appraisement was filed over one year and seven months after he was appointed independent executor. The probate code requires the Inventory and Appraisement to be filed within 90 days. He sold two parcels of the estate's real property and paid himself nearly $100,000 as "compensation." Additional evidence showed that the attorney failed to pay property taxes or correct code compliance violations on the real estate after receiving notices from the city. Accordingly, the estate was charged penalties and the only remaining property in the estate was scheduled for foreclosure |
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read more about mismanaged estates
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 A fiduciary can be removed if he has a conflict of interest with the beneficiary.
In a recent case, two brothers owned a farm. Both had done extra work on the farm. One of the brothers died. The one that died had an ex-wife and two children. He left his property to his children. His will created a trust for them. He named his brother both as executor of the will and as the trustee of the trust. His brother was, therefore, a fiduciary under the will and under the trust. The wife asked the court to remove the brother as executor and as trustee. The trial court refused to remove him and |
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read more about conflict of interest
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We post information about new cases dealing with contested probate matters on our blog.