Trusts are designed to protect assets, honor legacies, and provide for loved ones. But what happens when the person entrusted to manage those assets—the trustee—fails to act? Whether it’s ignoring a reimbursement claim, failing to pursue a legal dispute, or simply refusing to communicate, trustee inaction can jeopardize the very purpose of the trust.
This article describes the available remedies to beneficiaries when best practices are ignored.
Understanding the Trustee’s Role
It is important to underscore that Trustees are not passive caretakers. They are fiduciaries—individuals legally obligated to act in the best interests of the trust and its beneficiaries. [i]
This includes:
- Preserving trust assets
- Pursuing valid claims on behalf of the trust
- Communicating with beneficiaries
- Avoiding conflicts of interest
When a trustee fails to pursue a claim that could benefit the trust—such as a reimbursement from another estate or a dispute over property ownership—they may be violating their fiduciary duties.
Why Trustee Inaction Matters
Trustee inaction can result in:
- Loss of trust assets: If a valid claim is ignored, the trust may lose money or property that rightfully belongs to it.
- Delayed distributions: Beneficiaries may wait months or years for their share of the trust.
- Legal exposure: Trustees who fail to act may be personally liable for losses to the trust.[ii]
In one recent matter handled by Shields Legal, a trustee failed to properly maintain a ranch or pay property expenses, relying instead on the beneficiaries to support the property that would be transferred in a future distribution. The trust stood to lose hundreds of thousands of dollars unless the beneficiaries stepped in to manage the waste.
The Rights of a Beneficiary
Beneficiaries are not powerless in the face of trustee inaction or bad acts. Texas law provides beneficiaries with several tools to hold trustees accountable:
1. Demand Information
Beneficiaries have the right to request information about the trust’s administration[iii], including:
- Financial statements
- Legal claims or disputes
- Trustee decisions and communications
If the trustee refuses to provide this information, they may be violating their duty of transparency.[iv]
2. Request Action
If the beneficiary believes that there is a matter necessitating that the trust act, such as a reimbursement or property dispute, the beneficiary can formally request that the trustee pursue the matter. This request should be made in writing and include supporting documentation.[v]
3. Petition in Court
If the trustee refuses to act, the beneficiary can petition the court[vi] to:
- Compel the trustee to pursue the claim
- Remove the trustee for breach of duty
- Appoint a successor trustee
- Surcharge the trustee (i.e., hold them personally liable for losses)
Courts take fiduciary duties seriously. Trustees who fail to act in good faith or who ignore valid claims may face serious consequences.
What to Watch For:
Here are some red flags that may indicate trustee inaction:
- The trustee refuses to discuss potential claims or disputes.
- Beneficiaries are denied access to trust documents or financial records.
- The trustee has a personal relationship with someone who may be liable to the trust.
- The trust is losing value without explanation.
If a beneficiary notices any of these red flags, it may be a good time to seek legal advice.
Conclusion
Trustees have a legal and moral obligation to protect the interests of the trust and its beneficiaries. When they fail to act, beneficiaries have every right—and every reason—to step in.
At Shields Legal, we represent beneficiaries in trust disputes, fiduciary litigation, and estate claims. If you believe your trustee is failing to act, we’re here to help you understand your rights and protect your inheritance.
[i] Tex. Prop. Code § 113.051.
[ii] Tex. Prop. Code § 114.001 et seq.
[iii] Tex. Prop. Code § 113.151.
[iv] Tex. Prop. Code § 113.151.
[v] Tex. Prop. Code § 113.051.
[vi] Tex. Prop. Code § 115.001.
