The trustee's duty to keep beneficiaries informed

Texas common law has long imposed a “duty of full disclosure” on trustees.  However, until recently, the Trust Code contained no specific provision requiring this general duty. In 2005, the Texas Legislature added new Section113.06, taken from the Uniform Trust Code, providing that a trustee has a duty to keep beneficiaries reasonably informed concerning the administration of the trust and the material facts necessary for the beneficiaries to protect their interests. This is a mandatory (non-waivable) duty for trustees with respect to beneficiaries 25 years of age and over who are either (a)        entitled or permitted to receive current distributions or (b)        “first tier” remaindermen. In a legislative compromise with Texas Bankers Association, the settlor is permitted to waive this duty with respect to beneficiaries under age 25. However, an income beneficiary or “first tier” remainderman under age 25 still can demand an accounting under Section 113.151, assuming he or she finds out about the existence of the trust. Credit to Dallas trust attorney Bill Elliott for his expertise on this topic. North Texas and Dallas-Fort Worth trust litigation attorneys

TXPLMichael Young