The duty to inform and account, in plain language

The duty to inform: common law, protected by statute

Section 111.0035 is the Trust Code's list of what the instrument may and may not change. Among the rules it protects is a trustee's duty, for an irrevocable trust, to respond to a demand for an accounting under §113.151 when the demand comes from a beneficiary who is entitled or permitted to receive distributions or would receive them if the trust ended — and the trustee's common-law duty to keep such a beneficiary who is 25 years of age or older reasonably informed. The instrument may shape how; it may not switch the duty off for those beneficiaries.

The duty to inform is the common law's rather than a form: it is the practice of telling beneficiaries what they reasonably need to know to protect their interests — that the trust exists and who administers it, what it holds in broad terms, and what has happened to it. Texas courts read it into §113.051's general duty of good-faith administration. A trustee who communicates early and keeps copies of what was sent has most of what the duty asks.

The accounting on demand: §113.151

Any beneficiary may, by written demand, ask the trustee to deliver to each beneficiary a written statement of accounts covering all transactions since the last accounting or since the trust's creation. The trustee has until the 90th day after receiving the demand — or a longer period a court orders — to deliver it; after that any beneficiary may sue to compel it, and the court may award the costs and attorney's fees of the proceeding against the trustee in its discretion (§113.151; §114.064).

The section also measures frequency: a beneficiary may not force a statement of accounts more often than once every 12 months unless a court orders otherwise, and an interested person other than a beneficiary may petition the court for an accounting on a showing of cause. The instrument can ask for more — annual accountings without demand are common — but the 90-day right exists whatever the instrument says, for the beneficiaries §111.0035 protects.

What the statement must show: §113.152

Section 113.152 lists the contents. The statement shall show all trust property that has come to the trustee's knowledge or possession and has not previously been listed; a complete account of receipts, disbursements and other transactions for the period, including their source and nature, with receipts of principal and income shown separately; a listing of all property being administered with an adequate description of each asset; the cash balance on hand and the name and location of the depository; and all known liabilities owed by the trust.

That list is the record-keeping plan in reverse. A trustee who keeps a ledger that separates principal from income, retains the statement for every account the trust holds, and dates every distribution can produce the §113.152 statement without reconstruction. One that mixes the trust's money with personal funds, or pays expenses from memory, will spend the 90 days rebuilding what the statute assumes was kept.

Releases, agreements and the information behind them

A beneficiary with full legal capacity who is acting on full information may release the trustee from a duty or liability, in a writing delivered to the trustee (§114.005); a written agreement between trustee and beneficiary about a duty, power or liability is final and binding when the beneficiary signs it with capacity and full knowledge of the circumstances (§114.032). Both turn on the same thing the duty to inform turns on: the beneficiary knew. A release signed on a partial picture binds less than it appears to.

The practical sequence many Texas trustees follow is therefore the accounting first, the release after — and a licensed Texas attorney of the trustee's choosing to confirm that what was disclosed was enough for the release to hold. TrusteeClear keeps the accounting trail and the correspondence in one record so that sequence can be shown.

Закони, дослівно

• Default and mandatory rules; conflict between terms and statute

  § PR.111.0035 ↗

  Зрозуміле просте пояснення; дослівний текст статуту ще не засвідчено в нашій бібліотеці. Дивіться офіційний статут за посиланням вище.

• Demand for accounting

  § PR.113.151 ↗

  Зрозуміле просте пояснення; дослівний текст статуту ще не засвідчено в нашій бібліотеці. Дивіться офіційний статут за посиланням вище.

• Contents of accounting

  § PR.113.152 ↗

  Зрозуміле просте пояснення; дослівний текст статуту ще не засвідчено в нашій бібліотеці. Дивіться офіційний статут за посиланням вище.

Поширені запитання