Dealing with issues related to trusts, trustees, or estate management can get confusing. Maybe you’re not getting the funds you were promised or noticing that the trustee is not acting in your best interest. The whole process can feel unfair, especially if you’re unsure of your rights. If you’re facing fiduciary litigation, you need someone who understands the law and can fight for you.
In this blog, we’ll break down what fiduciary litigation is, the legal responsibilities of trustees, and what you can do if a trustee fails to distribute funds. Understanding these concepts can help you protect your interests and take action if necessary. The team at Massingill can help you protect your rights and get the results you deserve.
What Is Fiduciary Litigation?
Fiduciary litigation involves legal disputes between a trustee and beneficiaries. It often arises when trustees fail to uphold their responsibilities. One of these responsibilities is the trustee’s fiduciary duty, which means that the trustee must act in the best interest of the beneficiaries. When trustees fail to meet their responsibilities, legal action may be necessary.
In Texas, fiduciary litigation often happens when beneficiaries believe a trustee is mismanaging the trust. Knowing your rights and taking action is important if you’re in this position. By understanding the basics, you can protect your interests and ensure trustees follow the rules.
Trustee Responsibilities
Trustees have several important responsibilities, including:
- Managing trust assets responsibly,
- Distributing funds to beneficiaries as outlined in the trust,
- Keeping clear and accurate financial records, and
- Avoiding any conflicts of interest.
A trustee failing to meet these duties can lead to fiduciary litigation. Trustees must always act with honesty and integrity. They are legally obligated to put the beneficiaries’ needs first. If they don’t, beneficiaries may have grounds to sue.
Legal Obligations of Trustees in Texas
Trustees have strict legal obligations to manage trusts properly. Here’s what trustees must do specifically in Texas:
- Act with loyalty—trustees must prioritize the beneficiaries’ interests over their own;
- Duty of obedience—trustees are legally bound to follow the trust’s instructions; and
- Duty of care—trustees must provide updates and reports about the trust’s assets.
Beneficiaries may need to consider legal action if a trustee ignores these legal obligations. Texas law allows beneficiaries to sue or remove trustees who fail to fulfill their duties.
Demanding an Accounting
If you suspect the trustee is mishandling the trust, one of the first steps is demanding an accounting. This means asking the trustee to provide a detailed report of all transactions, expenses, and distributions related to the trust.
Here’s how to demand an accounting:
- Submit a written request—contact the trustee and request an accounting in writing;
- Give a reasonable deadline—allow the trustee a set amount of time to respond; and
- Consult an attorney—if the trustee ignores your request, seek legal help.
In Texas, beneficiaries have the right to review the management of trust assets. If a trustee refuses to provide this information, you may need to take legal action.
What to Do If a Trustee Fails to Distribute Funds
One of the most common reasons for fiduciary litigation is when a trustee fails to distribute funds to beneficiaries. Trustees must follow the trust’s terms and distribute funds as required. When they don’t, beneficiaries may suffer financial hardship.
If a trustee fails to distribute funds, here’s what you can do:
- Review the trust document—make sure you understand the terms of the trust;
- Communicate with the trustee—sometimes, a simple conversation can resolve the issue; and
- Hire an attorney and discuss filing a lawsuit—if the trustee still hasn’t distributed the funds, you may need to file a lawsuit.
By taking these steps, you can protect your rights and hold the trustee accountable. Massingill can guide you through this process and help you get the funds you’re owed.
Three-Step Plan to Resolve Trustee Issues
If you’re ready to take action against a trustee, follow this plan:
- Gather all necessary documents. Collect trust documents, emails, and other relevant information, including financial records, correspondence, and estate planning paperwork, to provide a complete picture of the trust’s history.
- Demand an accounting. Request a detailed report from the trustee about how they managed the trust, including income, disbursements, and any actions that may have affected the trust’s value or beneficiaries.
- Consult with an experienced attorney. Contact Massingill to evaluate your case and discuss your options. We’ll ensure that you understand your legal rights and have the knowledge to take the best course of action.
Following these steps can protect your rights and hold the trustee accountable. Don’t wait too long; promptly acting can make a significant difference.
For a legal consultation, call (512) 410-0343 or complete a Case Evaluation form
Securing Your Legacy: The Importance of Tailored Estate Planning with Massingill
Estate planning is essential for protecting assets and preserving a legacy. Many people underestimate the complexity of their estates, believing their situation is simple. However, family dynamics, property, and future needs can introduce unexpected challenges. At Massingill, we understand that every client’s circumstances are unique, and we provide personalized estate planning solutions tailored to their specific goals.
Consulting with an experienced attorney is crucial to navigating these complex matters. An attorney can review the trust, help you assess the situation, and determine whether there has been any breach of fiduciary duty. They can also guide you on the best legal steps to take, whether seeking a formal accounting, requesting the removal of the trustee, or filing a lawsuit.
At Massingill, we are committed to providing you with knowledgeable legal counsel and representation. Our experienced team can ensure your case is handled effectively, protecting your rights and securing your future. Reach out to us today to discuss your case and explore your options.
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Joshua Massingill
Joshua Massingill is an attorney practicing in Austin, Texas. He serves on the Texas State Bar’s Law Practice Management Committee, the Leander Educational Excellence Foundation (LEEF) Board of Directors, and the Success-Werx Board of Advisors. He mentors young entrepreneurs in Leander ISD’s INCubatorEDU program and is active in his church.
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