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Learn About a Trustee's Conflict of Interest in Texas

In Texas a **fiduciary **can be **removed **if he has a **conflict of interest **with the beneficiary.

In a recent case, two brothers owned a farm.  Both had done extra work on the farm.  One of the brothers died.  The one that died had an ex-wife and two children.  He left his property to his children.  His will created a trust for them.  He named his brother both as **executor **of the will and as the **trustee **of the trust.  His brother was, therefore, a fiduciary under the will and under the trust.

The wife asked the court to **remove **the brother as executor and as trustee.  The trial court refused to remove him and

the wife appealed.  The court of appeals agreed with the wife and removed the brother.  The court's reasoning was based on the fact that the **shared ownership **between the executor/*trustee *and the estate was a conflict of interest.  The court **must **remove a fiduciary when there is a conflict of interest between the fiduciary and the beneficiary. 242 /3 182.

Update:  The Supreme Court of Texas reversed this case and ruled that, under the facts of this case, the executor could not be removed.  If you think that a *fiduciary *has a conflict of interest, you should contact us to evaluate the case in light of this Supreme Court decision.P.C. 149C and Prop. C. 113.082. 284 /3 831.

Update 2: The Texas legislature passed legislation that has the effect of overruling the Supreme Court's decision in the first update. Now, a "material conflict of interest" will require removal of an executor or trustee. P.C.149C(a)(7).

**By **Robert Ray a Texas inheritance attorney.

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This page is general information about Texas law. It is not legal advice about your situation, and reading it does not create an attorney–client relationship. These matters turn heavily on specific facts and specific dates, and the law has exceptions this page does not cover. You should not take, or refrain from taking, any action based on this page. Discuss your circumstances with an attorney who can advise you on them.