pjc-family-2024-lib

E XPRESS T RUSTS

PJC 235.9

g. needs for liquidity, regularity of income, and preserva tion or appreciation of capital; and h. an asset’s special relationship or special value, if any, to the purposes of the trust or to one or more of the beneficiaries. 4. A trustee shall make a reasonable effort to verify facts rele vant to the investment and management of trust assets. The instruction above does not include subsections (e) and (f) of Tex. Prop. Code §117.004. If the trustee is a professional, subsection (f) should be included in the instruction: 5. A trustee who has special skills or expertise, or is named trustee in reliance upon the trustee’s representation that the trustee has special skills or expertise, has a duty to use those special skills or expertise. Breach of duty of good faith. Every trustee is required to act in good faith and in accordance with the purposes of the trust. Tex. Prop. Code § 111.0035(b)(4)(B). If it is alleged that this duty has been breached, submit the following: Did TRUSTEE fail to comply with his duty as trustee when he purchased the trust property ? A trustee fails to comply with his duty as trustee if he fails to act in good faith or fails to act in accordance with the purposes of the trust. “Good faith” means an action that is prompted by honesty of intention and a reasonable belief that the action was probably correct. Answer “Yes” or “No.” Answer: _______________ The definition of “good faith” is based on cases under Texas Probate Code section 243 (codified as Tex. Est. Code § 352.052) (will contests). See Ray v. McFarland , 97 S.W.3d 728, 730 (Tex. App.—Fort Worth 2003, no pet.); Collins v. Smith , 53 S.W.3d 832, 842 (Tex. App.—Houston [1st Dist.] 2001, no pet.). Although the foregoing cases use the disjunctive standard (intention or reasonable belief), the Committee has chosen the conjunctive standard (“and”) because the Committee believes that both the subjec tive standard of intention and the objective standard of reasonableness are appropriate to measure the conduct of a fiduciary. See Lee v. Lee , 47 S.W.3d 767, 795 (Tex. App.— Houston [14th Dist.] 2001, pet. denied) (executor could recover attorney’s fees in removal action despite breaches of fiduciary duty as long as he subjectively believed his defense was viable and his belief was reasonable under existing law). But note that

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