Why hasn’t my trust been distributed to me?

We routinely see many cases were trusts, whether created by a will or during life, should have been terminated years ago and distributed to the proper beneficiaries.  Sometimes these trusts “continue” years beyond their termination date.  If you find yourself in this situation, you have several remedies against the complacent trustee.

 

First, under Texas Trust Code Section 112.052, a trust terminates if by its terms the trust is to continue only until the expiration of a certain period or until the happening of a certain event and the period of time has elapsed or the event has occurred.  If the event of termination occurs, the trustee only has those powers–and for a reasonable period–to wind up the trust and make final distribution to the beneficiaries.  A trustee who fails to deliver trust assets after termination can be held liable for conversion.  Failing to inform the beneficiaries of the status of terminating the trust and when they should expect to receive their final distributions is also most likely a breach of the trustee’s duty of disclosure.

 

Second, Texas Trust Code Section 114.008 gives the beneficiary in this situation several options.  The beneficiary can file suit to compel the trustee to terminate and distribute the trust; enjoin the trustee from exercising any power not related to winding up the trust, seek monetary damages against the Trustee for the lost use of trust property, which vested in the beneficiary at the moment of termination; remove the trustee; deny the trustee any compensation; and obtain an accounting.

 

If you have been waiting on your final trust distribution, you should retain a probate and trust lawyer immediately to review the terms of the trust and advise you of your legal options.