Honest Mistakes by Fiduciaries Under Texas Law

EDITOR’S NOTE:

The management of an estate or trust is an important responsibility. Fiduciaries have an obvious obligation not to steal or misuse assets; so-called ‘honest mistakes’ are a different matter. This blog post, written by one of our Dallas-based attorney, explores the situation of an ‘honest mistake’ during a possible trust or estate dispute under Texas law.

Posted: May 21, 2016

What if a Fiduciary Makes a Mistake?

We represent executors, estate administrators, guardians, and trustees regularly. All of these people are what the law calls “fiduciaries.” They are responsible for taking care of someone else’s Fiduciaries Under Texas Lawproperty, and the law holds fiduciaries to very high standards.

Sometimes fiduciaries will steal property from the estate or trust, or sometimes fiduciaries will favor one beneficiary over another. These types of misconduct are easier to label as unlawful. But what if a fiduciary makes an “honest” mistake? What if a fiduciary accidentally deposited a check in her personal account instead of the estate account? Or what if the fiduciary reviewed the trust document and thought he was following it but breached it instead?

Because fiduciaries are held to very high standards, even a good faith mistake can be found unlawful. Fiduciaries must take every precaution always to act diligently and carefully on behalf of the estate, trust, or guardianship property. Negligence – which is the failure to exercise appropriate care – can be a seriously problem for the fiduciary, even when the fiduciary did not have a bad intention. Even an honest mistake can result in liability for a fiduciary. The bottom line for an executor, administrator, trustee, or guardian is that he or she should always act carefully and prudently and seek the assistance and advice of competent, trusted counsel.

EDITOR’S SUMMARY

A possible ‘honest mistake’ by a fiduciary with regard to a trust or estate can be awkward. However, the legal responsibilities under Texas law can really only be evaluated by an attorney. If you are frustrated with respect to an estate or trust, or are facing a possible probate dispute in the Dallas / Fort Worth area, please reach out to our attorneys for consultation. No two situations are alike.