News & Analysis as of

Beneficiaries Breach of Duty

Charles E. Rounds, Jr. - Suffolk University...

When trustee’s unauthorized self-dealing causes no direct harm to trust corpus can trustee still be surcharged?

Profit narrowly defined is total revenue minus total expenses, i.e., net gain. Profit broadly defined is merely a synonym for benefit. When a trustee’s unauthorized self-dealing directly harms the trust estate, the trustee is...more

Winstead PC

Court Affirmed An Order Removing A Trustee

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In Richey v. Brouse, the settlor created a special needs trust for her son, who had a mental disability and a seizure disorder that required day-to-day care. No. 03-23-00544-CV, 2024 Tex. App. LEXIS 8842 (Tex. App.—Austin...more

Gordon Rees Scully Mansukhani

Kositzka v. Fick: Key Lessons on Trustee Fiduciary Duty in Virginia Trusts

In a recent decision, the Court of Appeals of Virginia upheld a lower court’s ruling that Kositzka, Wicks and Company (KWC) breached its fiduciary duty to Edward Joseph Ryan, awarding his estate $999,050 in damages, attorney...more

Walkers

Retiring trustee – reasonable security and retention of assets

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Under section 43(b) of the Trusts (Guernsey) Law, 2007, when a trustee resigns or is removed it may require that it be provided with reasonable security for liabilities before surrendering trust property....more

Charles E. Rounds, Jr. - Suffolk University...

When Hostilities Break Out Between Co-trustees, Where Does That Leave Trust Counsel?

When hostilities break out between individual co-trustees, incumbent trust counsel faces a representation conundrum. In §8.8 of Loring and Rounds: A Trustee’s Handbook (2025), see appendix below, we grapple with the...more

Charles E. Rounds, Jr. - Suffolk University...

Individual Trustee Delegates to Financial Institution the Job of Taking Custody and Keeping Track of Income and Principal: The...

While PC software programs are a practical improvement over the trustee’s hard-copy ledger book, when it comes to keeping track of trust income and principal these programs still require serious clerical monitoring on the...more

Shook, Hardy & Bacon L.L.P.

Judgment Secured in Case Alleging Mismanagement of Artist's Trust

A five-year legal dispute between heirs of the renowned artist Thomas Hart Benton and the trust department that administered and managed the Benton Trust produced a significant ruling last month in Jackson County, Missouri...more

Charles E. Rounds, Jr. - Suffolk University...

Due to scrivener negligence, the dispositive provisions of a trust fail to reflect the deceased settlor’s wishes: Can it be that...

Assume the deceased settlor of a trust had intended that his niece be included in the beneficiary class, but his estate-planning attorney had negligently made no provision for her in the governing instrument. After settlor’s...more

Winstead PC

Court Holds That Contingent Remainder Beneficiary Has Standing To Sue Trustee For Breach Of Fiduciary Duty

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In In re Est., the court of appeals dealt with whether a contingent beneficiary can file claims against a trustee. No. 02-23-00104-CV, 2024 Tex. App. LEXIS 1878 (Tex. App.—Fort Worth March 14, 2024, no pet.)....more

Charles E. Rounds, Jr. - Suffolk University...

When the centerpiece of a trustee’s defense in a breach-of-fiduciary-duty action is an empty file cabinet and a general lack of...

An incident of the trustee’s duty to be generally prudent, to account (or report) to beneficiaries, and to refrain from breaches of the duty of undivided loyalty, such as engaging in unauthorized self-dealing, is the...more

Saul Ewing LLP

Tips for Trustees: Avoiding Breach of Fiduciary Duty Claims

Saul Ewing LLP on

For many clients, the inclusion of revocable and/or irrevocable trusts as part of their overall estate plan is an important feature. Revocable trusts can allow for probate avoidance and estate tax planning, whereas...more

Winstead PC

Texas Supreme Court Reverses Order In Trust Dispute Granting A Constructive Trust

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In In re Trust A & Trust C, a beneficiary sued a trustee for breach of fiduciary duty and sought a constructive trust over assets that were transferred out of the trust. 690 S.W.3d 80 (Tex. 2024)....more

Downey Brand LLP

No Such Thing as a Free Ride: Section 859 Awards Can Now Go To Whoever Does the Work

Downey Brand LLP on

Newcomers to probate litigation are frequently surprised by how differently things work in probate court, as opposed to your more straightforward civil courts. (And how do those newcomers know how civil courts work?  Law &...more

Winstead PC

Court Affirmed The Removal Of An Executor For Gross Mismanagement

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In Gordon v. Gordon, a couple created a revocable trust and named a friend, who provided financial advice, as successor trustee. No. 03-22-00454-CV, 2024 Tex. App. LEXIS 3611 (Tex. App.—Austin May 23, 2024, no pet. history)....more

Winstead PC

Court Affirmed Award Of Damages And Punitive Damages Against A Trustee Due To A Breach Of The Duty To Disclose, Held That A Trust...

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In Mendell v. Scott, a decedent had a trust that named him as primary beneficiary, and upon his death, the trust would continue for a niece provided that she did not commit a prohibited act. No. 01-20-00578-CV, 2023 Tex. App....more

ArentFox Schiff

Health Insurers Sued Over Use of Artificial Intelligence to Deny Medical Claims

ArentFox Schiff on

With the surge of interest in artificial intelligence (AI), it should be no surprise that health insurers have come under scrutiny concerning their use of AI predictive tools to deny medical insurance claims. The question...more

Winstead PC

Court Held That The TCPA Does Not Apply To Claim Involving Texas Trust Code Section 113.28 And Suits Against Third Parties

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In McCoy v. McCoy, trust beneficiaries sued the trustee for breaching his fiduciary duties by pursing claims against a third party when they instructed him not to do so. No. 08-23-00119-CV, 2023 Tex. App. LEXIS 6604 (Tex....more

Warner Norcross + Judd

How Should a Personal Representative Respond When Interested Persons Disagree Over Validity of a Proffered Will?

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The Michigan Court of Appeals recently issued a decision that offers guidance as to how a personal representative should respond when the interested persons disagree over the validity of a proffered will. In re Estate of...more

Warner Norcross + Judd

Do Estate Beneficiaries Have a Default Right to Live in Estate Property Rent Free Until the Property is Distributed?

Warner Norcross + Judd on

No, according to In re Estate of Elze D. Harris, Docket No. 362364 (September 28, 2023). In Estate of Harris, the decedent’s three children were embroiled in litigation over who should control their deceased father’s...more

Winstead PC

Court Affirms Receivership In Trust Case Based Solely On An Alleged Failure To Disclose And Did Not Require Traditional Equitable...

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In Moody Nat’l Bank v. Moody, a beneficiary sued a trustee regarding several allegations of breach of fiduciary duty. No. 14-21-00096-CV, 2022 Tex. App. LEXIS 7844 (Tex. App.—Houston [14th Dist.] October 25, 2022, pet....more

Hinshaw & Culbertson - Lawyers for the...

Different Outcomes for Two Law Firms in Legal Malpractice Case Confirm That Lawyers Representing Estate Administrator Do Not Owe a...

Brief Summary - The United States District Court for the Northern District of Illinois held that a law firm representing the administrator in estate proceedings did not owe a duty to a beneficiary of the estate, and the...more

Winstead PC

Court Affirms Finding Of An Oral Trust And Breach Of Duty By The Trustee

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In Ahlgren v. Ahlgren, plaintiffs sued a defendant alleging that the defendant was a trustee of an oral trust who breached duties by refusing to return certain property. No. 13-22-00029-CV, 2023 Tex. App. LEXIS 4182 (Tex....more

Winstead PC

Court Affirmed Temporary Injunction Precluding A Surviving Spouse From Acting As Trustee Of A Trust

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In Kirkland v. Kirkland, a husband and wife created a revocable trust. No. 02-22-00469-CV, 2023 Tex. App. LEXIS 3598 (Tex. App.—Fort Worth May 25, 2023, no pet. history)....more

ArentFox Schiff

Minority Business Owners and Trust Beneficiaries May Be Able to Obtain Otherwise Privileged Documents

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In certain circumstances, shareholders of corporations and members of limited liability companies can obtain confidential communications between corporate management and the company’s attorney that would otherwise be...more

Winstead PC

A Trustees Duties to Disclose - Presentation

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David F. Johnson will address the complex issues surrounding a trustee’s duty to disclose and will compare Texas law and the Uniform Trust Code on this topic. He will address disclosure requirements under trust documents and...more

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