In In re Estate of Boyle, beneficiaries sued a trustee for mismanagement for allegedly transferring trust assets to entities in which the trustee’s employees had an interest. No. 11-13-00151-CV, 2014 Tex. App. LEXIS 13553 (Tex. App.—Eastland December 19, 2014, no pet.). The court of appeals held that when a plaintiff alleges self-dealing by the fiduciary, a presumption of unfairness arises. The court held that no such presumption arose in this case because the alleged transactions were not between the bank/trustee and the estate where the trustee profited or obtained a benefit because the transaction allegedly was only between the trustee and entities with which the trustee’s employees had a relationship.
INTERSTING NOTE: Some believe that a trustee has the burden of proof to establish that it has not done anything wrong. That is generally not true. The presumption that places the burden on the fiduciary only applies when the fiduciary has engaged in a transaction with the trust or beneficiary. In other circumstances, the beneficiary, like any other plaintiff, has the burden to prove that the trustee did something wrong.