It is common for wills or trusts to provide that the fiduciary has the right to construe the document. For example, a provision may state that the fiduciary shall resolve any question regarding the construction, interpretation, or operation of the will/trust or any matter involving the administration of the estate/trust
Webinar Series: Financial Services – Advising Trustees Who Manage Closely-Held Business Interests
Settlors often place some or all of the ownership in a closely-held business in a trust. A trustee managing a trust with an interest in a closely held business has difficult management issues to address and this often raises disputes. This presentation will address: (1) considerations in placing closely-held business
Suing Attorneys In Texas For Participating in Fiduciary Breaches
It is not uncommon for an attorney to execute all or part of his or her client’s wishes, which may be in breach of a fiduciary duty owed by the client to a third party. The third party can certainly sue the client for breaching fiduciary duties. But can the third party also sue the attorney for participating in the client’s actions?
Corporate Trustee’s Statements May Suffice For A Statutory Accounting
Trust beneficiaries often request a corporate trustee to prepare a statutory accounting. The Texas Trust Code in Section 113.151 provides that a beneficiary may request a written statement of accounts. Tex. Prop. Code 113.151. Regarding what information needs to be contained in a written statement of accounts, parties and the courts must first look to the terms of the trust. Tex. Prop. Code § 111.0035(b). As one commentator provides: “The settlor may specify in the terms of the trust instrument what must be contained in an accounting by the trustee. When the trust instrument is silent concerning the contents of an accounting, the Trust Code provides a list of items that must be included in every accounting.” 4 Texas Probate, Estate and Trust Administration § 81.63. A trustee and a court should give deference to the trust document and follow its requirements (whether more stringent or less stringent than a statutes require).
A Limitation-Of-Liability Clause May Or May Not Be Enforceable For Breach Of Fiduciary Duty Claims
Parties often add limitation-of-liability clauses to their agreements. These types of clauses can purport to limit a party’s claims or damages or both. Damage-limitation clauses can take many different forms. For example, such a clause may forbid the recovery of consequential or loss profits damages. Cont’l Holdings, Ltd. v. Leahy, 132 S.W.3d 471, 475-76 (Tex. App.—Eastland 2003, no pet.). Further, a contractual provision setting an upper limit on the amount recoverable is a limitation of liability provision. Arthur’s Garage, Inc. v. Racal-Chubb Sec. Sys., 997 S.W.2d 803, 810 (Tex. App.—Dallas 1999, no pet.); Fox Elec. Co. v. Tone Guard Sec., Inc., 861 S.W.2d 79, 83 (Tex. App.—Fort Worth 1993, no writ). If a plaintiff brings suit, the terms of the contract determine the relative positions of the parties and control the level of liability of either party. Federated Dept. Stores, Inc. v. Houston Lighting & Power Co., 646 S.W.2d 509, 511 (Tex. App.—Houston [1st Dist.] 1982, no writ).
Texas Legislature Extends The Rule Against Perpetuities To 300 Years For Trusts
The Texas Legislatures recently passed a bill that takes effect on September 1, 2021 that extends the rule against perpetuities to 300 years for trusts. The Legislature forwarded the bill (HB 654) to the governor on May 20, 2021, but he has not yet signed the bill into law. But unless he vetoes the bill, it will become law after ten days.
The Texas Constitution prohibits perpetuities: “Perpetuities and monopolies are contrary to the genius of a free government, and shall never be allowed . . . .” Tex. Const. art. I, § 26. A perpetuity is a restriction on the power of alienation that lasts longer than a prescribed period. ConocoPhillips Co. v. Koopmann, 547 S.W.3d 858, 866-67 (Tex. 2018). The rule against perpetuities “should be a check on vain, capricious action by wealthy empire builders. But it should not be a constantly present threat to reasonable dispositions which slightly overstep a technical line.” Rekdahl v. Long, Tex., 417 S.W.2d 387 (1967) (Steakley, J., dissenting) (citing W. B. Leach & O. Tudor, The Rule Against Perpetuities § 24.11 at 43 (1957)).
Bankruptcy Court Discussed The Fiduciary Duties Owed To A Limited Liability Company And Its Creditors By Its Manager
In In re Silver State Holdings, in a bankruptcy proceeding a trustee of a limited liability company sued its former manager for breach of fiduciary duty and another entity for conspiracy to breach fiduciary duty arising out of a sale of property owned by the company. No. 19-41579-MXM 26 LLC, ADVERSARY NO. 19-4043-MXM 7901, 2020 Bankr. LEXIS 3531 (N.D. Tex. Bankr. December 17, 2020).
Court Holds That Insurers Do Not Generally Owe Fiduciary Duties To Insureds
In Ec & Sm Guerra v. Phila. Indem. Ins. Co., an insured sued its property insurer for breach of fiduciary duty and other claims arising from the insurer’s denying a claim for wind damage and disagreeing with an appraiser’s report. SA-20-CV-00660-XR, 2020 U.S. Dist. LEXIS 196735 (W.D. Tex. October 21, 2020). The insurer filed a motion to dismiss, which the court granted.
Use Of Equitable Defenses In Breach Of Fiduciary Duty Litigation
A. Introduction
It is not uncommon for beneficiaries to sue a trustee for actions that the beneficiaries had knowledge of but where they failed to object to that conduct for a period of time. In this circumstance, the trustee may want to raise certain equitable defenses to those claims, such as laches, ratification, waiver, and estoppel. Equitable defenses are appropriate for breach of fiduciary duty claims as fiduciary relationships originate in equity. At the core of these equitable defenses is the concept that a party should not be allowed to act inconsistently: have knowledge of conduct and fail to object to it for a period of time (thereby tacitly agreeing to the conduct) and then later raising claims against the trustee for the same conduct.
Receiverships in Trust and Estate Litigation in Texas
- Introduction
A plaintiff in a trust or estate dispute often needs to seek a remedy before trial to protect it from immediate injury, to protect the assets made the basis of the suit, or to discover the real condition of the parties’ relationship or business. There are different types of relief that a plaintiff can seek.