Could it be considered a breach of fiduciary duty on the part of a trustee to refuse to hire an investment professional?

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Could it be considered a breach of fiduciary duty on the part of a trustee to refuse to hire an investment professional?

The trustee in this case knows nothing about finance and investments, and has made several poor financial decisions despite my advice (I am a beneficiary and successor trustee and the Trustor is still living).

Asked on January 19, 2014 under Estate Planning, Texas

Answers:

Brook Miscoski / Hurr Law Office PC

Answered 7 years ago | Contributor

Under the Texas Uniform Prudent Investor Act, a trustee is required to act as a prudent investor within the meaning of the statute.

Depending on the facts, it's possible that if the trustee isn't able to meet the standard of care required by the statute, or if the trustee just isn't meeting that standard, then the trustee could be removed. There are steps a beneficiary can take to determine whether the trustee is meeting the standard.

However, you should realize that the fact that you disagreed with some investments that turned out poorly, and that the trustee isn't an investment professional, doesn't mean that the trustee can be removed. A prudent investor doesn't need to be an expert, and the nature of investment is that sometimes it will be wrong.


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