Failure to Disclose and Fiduciary Fraud
Many cases we handle involve a Trustee or other fiduciary failing to disclose important facts about the trust, trust property, or events that affect the rights of the beneficiary. We often find this failure to disclose is part of scheme by the Trustee to hide self-dealing, fiduciary fraud or other actionable conduct. In these circumstances the Trustee’s conduct can be a form of fraud
A Trustee owes a fiduciary duty notify the beneficiary upon request complete and accurate information as to the administration of the trust. Shannon v. Frost Nat. Bank of San Antonio, 533 S.W.2d 389, 393
(Tex. Civ. App.—San Antonio 1975, writ ref'd n.r.e.).
A Trustee’s duty to disclose is usually not triggered by demand. In other words, the Trustee has a duty to disclose important facts concerning the trust regardless of whether a beneficiary requests it. Accordingly, under some situations, a Trustee must:
A Trustee’s duty to disclose is usually not triggered by demand. In other words, the Trustee has a duty to disclose important facts concerning the trust regardless of whether a beneficiary requests it. Accordingly, under some situations, a Trustee must:
- promptly inform beneficiaries of the existence of the trust, of their status as beneficiaries and their right to obtain further information, and of basic information concerning the trusteeship
- inform beneficiaries of significant changes in their beneficial status
- keep representative beneficiaries reasonably informed of changes involving the trusteeship and about other significant developments concerning the trust and its administration, particularly material information needed by the beneficiaries for the protection of their interests.
Knowing how these duties to disclose apply in a given situation requires experienced trust litigation counsel. We would appreciate the opportunity to hear about your case. Please contact us to see if we can help.