Texas Property Code 114.007 – Exculpation of Trustee
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(a) A term of a trust relieving a trustee of liability for breach of trust is unenforceable to the extent that the term relieves a trustee of liability for:
(1) a breach of trust committed:
(A) in bad faith;
(B) intentionally; or
(C) with reckless indifference to the interest of a beneficiary; or
(2) any profit derived by the trustee from a breach of trust.
(b) A term in a trust instrument relieving the trustee of liability for a breach of trust is ineffective to the extent that the term is inserted in the trust instrument as a result of an abuse by the trustee of a fiduciary duty to or confidential relationship with the settlor.
Terms Used In Texas Property Code 114.007
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Common law: The legal system that originated in England and is now in use in the United States. It is based on judicial decisions rather than legislative action.
- Fiduciary: A trustee, executor, or administrator.
- Trustee: A person or institution holding and administering property in trust.
(c) This section applies only to a term of a trust that may otherwise relieve a trustee from liability for a breach of trust. Except as provided in § 111.0035, this section does not prohibit the settlor, by the terms of the trust, from expressly:
(1) relieving the trustee from a duty or restriction imposed by this subtitle or by common law; or
(2) directing or permitting the trustee to do or not to do an action that would otherwise violate a duty or restriction imposed by this subtitle or by common law.