DRAFTING FOR MULTIPLE EXECUTORS, TRUSTEES, AND

DRAFTING FOR MULTIPLE EXECUTORS,

TRUSTEES, AND AGENTS

Presented and Written by:

MARK R. CALDWELL, Dallas

Caldwell, Bennett, Thomas, Toraason & Mead, PLLC

Co-author:

SARAH V. TORAASON, Dallas

Caldwell, Bennett, Thomas, Toraason & Mead, PLLC

State Bar of Texas

ANNUAL

ESTATE PLANNING & PROBATE DRAFTING

October 26-27, 2022

Houston

CHAPTER 13

. This outline and any related presentation are for educational purposes only and are not intended to

establish an attorney-client relationship or provide legal advice. While some areas of the law are settled,

other remain unsettled. In certain areas, the authors have endeavored to identify differing positions or

arguments which may be taken or made with respect to specific unsettled legal issues.

Mark R. Caldwell

Shareholder

Mark R. Caldwell routinely represents executors, guardians, and beneficiaries in complex estate, trust, and

guardianship litigation. He has also represented fiduciaries in all phases of estate, trust, and guardianship

administration. Mark is passionate about holding those who exploit others accountable and defending those who have

been wrongfully accused of doing so. Mark enjoys the investigatory aspects of estate and trust litigation, including

reviewing and analyzing medical, financial, and suspicious property records and transactions. Mark is committed to

developing and maintaining strong, personal relationships with his clients. He endeavors to offer smart, pragmatic

and cost-effective legal advice. Mark believes that the strongest winning position is one that is simple, direct, and

understandable. While he strives to advocate strong, aggressive positions for clients, Mark also strives to resolve

disputes in an ethical, reasonable, and cost-effective manner.

Biography

Mark was born on June 29, 1979 at Beaufort Naval Hospital in Beaufort, South Carolina where his father flew F-4

Phantoms at the nearby Marine Corps air station (although his mother had the more difficult job of raising three

children). After having lived in South Carolina, North Carolina, Hawaii, and California, he returned to North Texas

and attended Eastfield Community College before transferring to Southern Methodist University, where he earned a

full academic scholarship. One year later, he attended the London School of Economics as a General Course Student.

Mark earned his law degree from New England School of Law in Boston, Massachusetts in 2005.

Mark is married and has three children. He enjoys spending time with his family, living an active life-style and

traveling.

Representative Experience

• Obtained favorable jury verdict for lack of testamentary capacity and undue influence in hotly contested will

contest and favorable jury verdict for lack of contractual capacity and breach of fiduciary duty in same

lawsuit regarding certain non-probate beneficiary designations.

• Recovered significant settlement in case involving fraud on the community and breach of fiduciary duty

through the use of a power of attorney.

• Obtained favorable jury verdict in a guardianship case involving an elderly ward.

• Successfully defeated claim that will was executed without testamentary capacity on summary judgment.

• Routinely obtains temporary injunctions and temporary guardianships to halt rogue agents from abusing their

powers of attorney.

• Obtained partial summary judgment against Trustee for breach of fiduciary duty involving the failure to

account.

• Represents guardians, executors, and administrators in all phases of guardianship and estate administration.

• Routinely serves as attorney ad litem and guardian ad litem in guardianship cases.

• Routinely serves as temporary guardian in contested guardianship cases and as temporary administrator and

administrator in decedents’ estates.

• Successfully obtained ancillary estate administration in California to collect and administer assets and claims

due and owing to Texas estate.

• Successfully transferred guardianships to and from California.

Public Speaking & Publications

• Co-Author/Panelist: Getting Back on Track – What to do When Best-Laid Estate Plans Get Derailed – 28

Annual Advanced Estate Planning Strategies Course (2022).

• Author/Speaker: Disclosure and the Fiduciary: How Much, How Far and to Whom? – 15

Annual

Fiduciary Litigation Seminar (2020).

• Author/Speaker: North Texas Probate Bench Bar: A Trustee’s Duty to Disclose: A Dangerous Trap or a

Useful Tool? (2020).

• Co-Author: You Settled it Right? Family Settlement Agreements in Probate, Trust and Guardianship

Disputes” – Texas Tech Estate Planning and Community Property Law Journal, 11 Est. Plan. & Community

Prop. L.J. 213 (Spring 2019).

• Co-Author/Speaker: State Bar of Texas: Changing IRA Beneficiary Designations After Death by Court

Order or Agreement – Intermediate Estate Planning and Probate (2019)

• Co-Author/Speaker: National College of Probate Judges: “A Road Increasingly Traveled: Multistate Probate

Issues” – (2019).

• Co-Author: “You Settled It, Right? Family Settlement Agreements in Probate, Trust and Guardianship

Disputes” – North Texas Probate Bench Bar (2019).

• Co-Author/Speaker: “Choosing Your Own Adventure and Navigating Self-Dealing Transactions Under the

New Power of Attorney Act” – 29th Annual Estate Planning & Probate Drafting (2018).

• Co-Author/Speaker: “A Road Increasingly Traveled: Multistate Probate Issues” – The Estate Planning, Trust

and Probate Law Section of the San Diego County Bar Association (2017).

• Co-Author: “Ensure Powers of Attorney Fulfill Intended Purposes” – Estate Planning, Thompson Reuters

Checkpoint, (January 2018).

• Co-Author: National College of Probate Judges: “Constitutional Considerations When Restricting Access to

the Proposed Ward in Contested Guardianship Proceedings” – Spring Journal (2017).

• Co-Author/Speaker: State Bar of Texas: State Bar of Texas: “Litigation Involving Powers of Attorney &

Bank Accounts” – Advanced Estate Planning & Probate (2017).

• Co-Author/Speaker: State Bar of Texas: “What’s New in Guardianship” – Advanced Guardianship Law

Course (2017).

• Co-Author/Speaker: State Bar of Texas: “The Shortest Route to Victory: Summary Judgment Practice in

Probate and Trust Litigation” – 40th Annual Advanced Estate Planning and Probate Course (2016).

• Co-Author/Speaker: Dallas County Bar Association, Probate, Trust and Estates Section: “Trends in

Litigating and Administering Guardianships” (2016).

• Author/Speaker: State Bar of Texas: “Injunctive Relief–The Lethal Preemptive Strike in Probate, Trust and

Guardianship Litigation” – 39th Annual Advanced Estate Planning and Probate Course (2015).

• Co-Author/Speaker: State Bar of Texas: “Elder Exploitation” – Advanced Guardianship Law (2015).

• Co-Author/Speaker: Travis County Bar Association: “Winning the Battle & the War: A Remedies–Centered

Approach to Litigation Involving Durable Powers of Attorney” (2015).

• Co-Author: “Properly Performing Annual Accounts in Guardianships and Management Trusts Where One or

Both Spouses are Incompetent” – Real Estate, Probate, & Trust Law Reporter, Volume 52, No. 4 (2014).

• Served as Moderator for the Guardianship and Ad litem Attorney Certification Course, sponsored by the

Dallas Bar Association Probate, Trusts & Estate Section, Dallas County Probate Courts and the Dallas

Volunteer Attorney Program to train lawyers in the representation of guardians of indigent wards, and the

role and responsibilities of the Attorney ad litem (2014).

• Co-Author: “Winning the Battle and the War; A Remedies—Centered Approach to Litigation Involving

Durable Powers of Attorney”– 64 Bay. L. Rev. 435 (Spring 2012).

• Author/Speaker: “An Introduction to Guardianships” – Texas Department of Assistive & Rehabilitative

Services (DARS), Dallas, Texas (Fall 2010; Spring 2011).

• Co-Author/Speaker: “Proof of Facts and Common Evidentiary Problems Encountered in Contested Probate

Proceedings,” at the Seventh Probate Litigation Seminar, sponsored by the Tarrant County Probate Bar

Association (September 2010).

• Author, A Good Deed Repaid: “Awarding Attorney’s Fees in Contested Guardianship Proceedings” – 51 S.

Tex. L. Rev. 439 (Winter 2009).

Community and Bar Association Involvement

• State Bar of Texas; Real Estate, Probate and Trust Law Section, Guardianship Committee; Member (2015-

2018)

• Dallas Bar Association; Probate and Trust Section Member; Trial Skills Section Member

• Dallas Bar Association; Probate and Trust Section; Council Member (2015-2016)

• Dallas Association of Young Lawyers; Elder Law Section Member

• Member, St. Thomas More Society

• Dallas Bar Mentor Program; Participated as Mentee; Mentor, Edward V. Smith III

• Board of Directors and Vice President, City of Sachse Economic Development Corporation (2010-2014)

• Member, Charter Review Commission, City of Sachse, Texas (2012-2013)

Certifications, Awards and Recognition

• Board Certified Estate Planning and Probate Law – Texas Board of Legal Specialization

• Named Texas Super Lawyer by Texas Super Lawyers, a Thompson Reuters Service (2020-2022)

• Named Rising Star by Texas Super Lawyers, a Thompson Reuters service (2014-2019)

• Selected Rising Stars Top 100 Up & Coming Attorneys in Texas, a Thompson Reuters service (2018-2019)

• Named Best Lawyers in Dallas, by D. Magazine (2018-2021)

Education

• General Course, The London School of Economics, London, England (2001-2002)

• B.A., magna cum laude, Southern Methodist University, Dallas, Texas (2002)

• J.D., New England Law | Boston, Boston, Massachusetts (2005)

Sarah V. Toraason

Shareholder

An experienced litigation attorney, Sarah Toraason has ten years’ experience representing clients in complex

commercial disputes involving securities, contract, business tort, insurance coverage, ERISA, and intellectual

property claims in state and federal courts as well as arbitration. Sarah now applies her extensive business litigation

background to representing clients in estate, trust, and guardianship disputes. She strives to be a strong advocate for

her clients and approaches every matter with the goal of producing a successful and efficient resolution of their case.

Sarah graduated from the University of Richmond with a B.A. in Music and Leadership Studies and received her

M.B.A. and M.A. from the University of Cincinnati. She earned her J.D. from William & Mary School of Law. After

graduating from law school, Sarah served as a law clerk to the Honorable Henry Coke Morgan, Jr., of the United

States District Court for the Eastern District of Virginia. She then clerked for the Honorable Fortunato P. Benavides

of the United States Court of Appeals for the Fifth Circuit in Austin, Texas.

Prior to entering the legal profession, Sarah studied music and worked in arts administration for the Honolulu

Symphony in Honolulu.

Sarah is admitted to practice in California (2003) and Texas (2004).

Representative Experience

• Obtained favorable jury verdict for lack of testamentary capacity and undue influence in hotly contested will

contest and favorable jury verdict for lack of contractual capacity and breach of fiduciary duty in same lawsuit

regarding certain non-probate beneficiary designations.

• Successfully defended former CFO of a national home-building company in a securities fraud class action in the

Southern District of Florida and on appeal to the Eleventh Circuit.

• Obtained denial of class certification on behalf of Fortune 500 media company and certain officers and directors

in a securities class action in the Northern District of Texas and on appeal to the Fifth Circuit.

• Represented for-profit educational institution in the Southern District of Texas and on appeal to the Fifth Circuit

in a suit seeking to enforce a confidentiality provision in an arbitration agreement. The Fifth Circuit upheld

award of preliminary and permanent injunction based on the confidentiality clause.

• Won dismissal of claims challenging design and administration of ERISA-governed severance plan and secured

award of costs in favor of defendants. Defended judgment on appeal to the Fifth Circuit.

• Defended CEO of oil and natural gas company in a series of ten shareholder and derivative suits filed in state and

federal court seeking to challenge potential acquisition of the company

• Defended oil and gas company in a hydraulic fracking case.

• Represented Fortune 500 company in a significant trademark suit.

• Represented large pharmaceutical manufacturer in putative nationwide antitrust class actions brought by direct

and indirect purchaser plaintiffs in the Eastern District of Pennsylvania.

• Obtained dismissal of claims brought against insurance company and former claims adjuster in Texas state court.

Publications & Public Speaking

• Co-presenter: “Jury Selection in Probate Disputes: Avoiding the Minefield and Winning the Case,” Clear Law

Institute National Webinar (September 2019).

• Co-author/Co-presenter: “A Road Increasingly Traveled: Multistate Probate Issues,” National College of Probate

Judges Spring Journal and Spring Conference (2019).

• Co-author: “Not Your Typical Voir Dire: Selecting a Jury in a Will Contest Case,” Dallas Bar Association,

Headnotes (December 2018 edition).

• Co-author/Co-presenter: “A Road Increasingly Traveled: Multistate Probate Issues,” Estate Planning, Trust and

Probate Law Section of the San Diego County Bar Association (June 7, 2018).

• Co-author: “Constitutional Considerations When Restricting Access to the Proposed Ward in Contested

Guardianship Proceedings,” National College of Probate Judges Spring Journal (2017).

• Co-author/Co-presenter: “Planning to Avoid Power of Attorney Litigation,” Texas Trust School (July 2017).

• Co-author/Co-presenter: “The Quick and Dirty E-Discovery Lowdown: An Introduction To What Should Be

Keeping You Up at Night,” Texas Bar CLE (June 2010).

• Co-author: “Student Liability Lawsuits: Suggested Best Practices to Avoid Class and Mass Actions and

Minimize Potential Exposure” (August 2010).

Education

• B.A., magna cum laude, University of Richmond, Richmond, Virginia (1996)

• M.B.A., University of Cincinnati, Cincinnati, Ohio (1998)

• M.A., University of Cincinnati, Cincinnati, Ohio (1998)

• J.D., Order of the Coif, William & Mary School of Law, Williamsburg, Virginia (2002)

Community and Bar Association Involvement

• Dallas Bar Association; Probate, Trust & Estates Section Member

• State Bar of Texas

• The William ‘Mac’ Taylor Inn of Court, Barrister

• Attorneys Serving the Community

• Assistant chancellor, Episcopal Diocese of Dallas

Drafting for Multiple Executors, Trustees, and Agents Chapter 13

TABLE OF CONTENTS

I. INTRODUCTION ................................................................................................................................................... 1

II. CO-TRUSTEES ...................................................................................................................................................... 2

A. Section Overview ............................................................................................................................................ 2

1. Key Points ............................................................................................................................................... 2

2. Key Questions to Consider ...................................................................................................................... 2

B. Sources of Authority in Analyzing Co-Trustee Issues .................................................................................... 2

C. Co-Trustee Fiduciary Duties ........................................................................................................................... 3

1. When a Co-Trustee’s Fiduciary Duties Begin ......................................................................................... 3

2. Each Co-Trustee Owes Fiduciary Duties ................................................................................................. 3

3. Duty to Participate ................................................................................................................................... 6

4. Duty to Disclose By and Among Co-Trustees ........................................................................................ 6

D. Decision Making by Co-Trustees .................................................................................................................... 7

E. Co-Trustees Liability for Acts of Other Co-Trustee ....................................................................................... 8

1. Improper Delegation ................................................................................................................................ 8

2. Failure to Exercise Reasonable Care ....................................................................................................... 9

3. Failure to Redress Breach of Trust .......................................................................................................... 9

4. Joint and Several Liability ....................................................................................................................... 9

F. Co-Trustee Succession .................................................................................................................................... 9

III. CO-EXECUTORS/ADMINISTRATORS ............................................................................................................ 10

A. Section Overview .......................................................................................................................................... 10

1. Key Points ............................................................................................................................................. 10

2. Key Questions to Consider ....................................................................................................................

B. Sources of Authority in Analyzing Co-Executor/Administrator Issues ........................................................ 10

C. Co-Executor/Administrator Fiduciary Duties ............................................................................................... 12

1. When a Co-Executor/Administrator’s Duties Begin ............................................................................. 12

2. Each Co-Executor/Administrator Owes Fiduciary Duties ..................................................................... 12

3. Duty to Participate ................................................................................................................................. 14

4. Duty to Disclose by and Among Co-Executors/Administrators ............................................................ 15

D. Decision Making by Co-Executors/Administrators ...................................................................................... 15

E. Co-Executor/Administrator Liability For Acts of Other Co-Executor/Administrator .................................. 17

1. Failure to Exercise Reasonable Care ..................................................................................................... 17

2. Failure to Redress Breach of Duty......................................................................................................... 17

F. Co-Executor/Administrator Succession ........................................................................................................ 17

IV. CO-AGENTS ........................................................................................................................................................ 18

A. Section Overview .......................................................................................................................................... 18

1. Key Points ............................................................................................................................................. 18

2. Key Questions to Consider .................................................................................................................... 18

B. Sources of Authority in Analyzing Co-Agent Issues .................................................................................... 18

C. Co-Agent Fiduciary Duties............................................................................................................................ 18

1. When a Co-Agent’s Fiduciary Duties Begin ......................................................................................... 20

2. Duty to Participate ................................................................................................................................. 21

D. Decision Making by Co-Agents .................................................................................................................... 22

E. Co-Agent Liability for Acts of Other Agent ................................................................................................. 23

F. Co-Agent Succession ....................................................................................................................................

V. OTHER LEGAL THEORIES REGARDING LIABILITY FOR CO-FIDUCIARY’S ACTS & OMISSIONS .. 23

A. Knowing Participation in Breach of Fiduciary Duty ..................................................................................... 23

B. Civil Conspiracy ............................................................................................................................................ 24

VI. BEST DRAFTING PRACTICES ......................................................................................................................... 24

A. Appointment, Resignation, Removal, and Replacement ............................................................................... 24

1. Trustees .................................................................................................................................................. 24

2. Executors/Administrators ...................................................................................................................... 25

Drafting for Multiple Executors, Trustees, and Agents Chapter 13

3. Agents .................................................................................................................................................... 25

B. Decision-Making ........................................................................................................................................... 25

1. Co-Trustees ............................................................................................................................................ 25

2. Co-Executors/Administrators ................................................................................................................ 26

3. Co-Agents .............................................................................................................................................. 26

C. Compensation ................................................................................................................................................ 26

D. Arbitration ..................................................................................................................................................... 26

VII. ALTERNATIVES TO CO-FIDUCIARIES .......................................................................................................... 26

Drafting for Multiple Executors, Trustees, and Agents Chapter 13

DRAFTING FOR MULTIPLE

EXECUTORS, TRUSTEES, AND

AGENTS

I. INTRODUCTION

Selecting a fiduciary is one of the most important

decisions to make during the estate planning process.

In fact, this decision “probably has the most frequent

and dramatic impact on family harmony.”

Many

people are inherently predisposed to appoint a family

member in these roles because they grossly

underestimate the risk to family harmony and grossly

overestimate the benefits of naming a family member

as a fiduciary.

The same tendency applies when

naming co-fiduciaries. A client underestimates the risk

of naming more than one fiduciary and grossly

overestimates the benefits of appointing two or more

people to this role.

This happens for a variety of reasons. Clients

commonly desire to appoint more than one family

member as a fiduciary to avoid feelings of jealously or

resentment. When two people have different skills or

talents, clients believe that by naming both people as

co-fiduciaries, they are getting the best of both worlds.

Similarly, many clients believe that naming co-

fiduciaries imposes a “check and balance” system onto

the administration of their trust, estate, or property.

Appointing co-fiduciaries, however, often creates more

problems than it solves. Appointing co-fiduciaries,

particularly, when a parent requires their children to do

a job as a group, has been referred to as “[t]he number

one opportunity for an estate plan to go wrong.”

one practitioner notes, naming children as co-

fiduciaries is like putting them in a rowboat:

Imagine loading the children into a rowboat

on a big lake and requiring them to agree on

one destination when their rowboat can go in

only one direction, no matter how many

passengers it holds . . . It is very difficult for

children with different financial profiles,

different values, or different residential states

to be on the same track at all times with each

other, not to mention their respective

spouses. Plans that require children to agree

among themselves when their parents are

both gone are simply fraught with danger.

Timothy P. O’Sullivan, Family Harmony: An All Too

Frequent Casualty of the Estate Planning Process, 8 Marq.

Elder’s Advisor 253, 257–58 (2007)

Id.

Robert G. Edge, Children in A Rowboat and Other

Potential Mistakes in Estate Planning, Part I, Prob. & Prop.

6, 7 (2003).

Id. at 7-8.

Naming co-fiduciaries carries at least three downsides.

First, serving as a co-fiduciary is a complex job

which is difficult to navigate. When someone is named

as a trustee, executor or agent, he or she is becoming a

fiduciary and taking on numerous and significant legal

duties. Rarely does a fiduciary fully understand all of

his or her fiduciary duties. But when someone

becomes a co-fiduciary, he or she is taking on all the

normal fiduciary duties, plus additional duties — thus,

they are a “fiduciary plus.” It is difficult for each co-

fiduciary to understand his or her duties and/or

potential liability. The governing instruments, statutes,

and common law applicable to such relationships —

particularly, with respect to a co-fiduciary’s duties and

liabilities — vary greatly in their development and

specificity. Determining a co-fiduciary’s particular

duty or liability can be extremely difficult even for the

most seasoned lawyer, let alone a lay person. Rarely

are estate planning clients properly educated on the

duties and liabilities of co-fiduciaries while

contemplating whether to appoint more than one

fiduciary.

Second, each co-fiduciary should ideally work

together; however, each co-fiduciary may attempt to

“row the boat” at different speeds and in a different

direction — or take the oar out of the other co-

fiduciary’s hand altogether. For example, with respect

to decision-making, co-trustees are generally required

to act unanimously, unlike co-executors/administrators

and co-agents, who may generally act independently.

If anything, appointing co-fiduciaries lays the

groundwork for a disordered, inconsistent and

inefficient trust, estate, or property administration.

Appointing co-fiduciaries also increases the risks of

deadlock. Rarely do co-fiduciaries engage in the level

of communication and cooperation necessary to

administer an estate in an efficient and coordinated

manner. Securing the acceptance of an alternative co-

fiduciary to fill a vacancy can be challenging.

Third, adding more than fiduciary typically

increases the cost of administration. Initially, co-

fiduciaries must coordinate their activities amongst

themselves, which usually means it takes longer to

make decisions and to act. There is also inherent

duplication. Staying informed often requires them to

keep and maintain independent records. Due to the

potential for conflicts and disagreements among co-

fiduciaries, each co-fiduciary may need his or her own

legal counsel, adding more costs. Resolving

disagreements/deadlocks and/or remedying the conduct

of a rogue co-fiduciary usually requires court action,

further increasing costs.

For these reasons, many estate planners strongly

recommend against naming co-fiduciaries and many

Drafting for Multiple Executors, Trustees, and Agents Chapter 13

institutional/professional fiduciaries will not serve in

such a role.

This article attempts to arm the estate planner with

the information necessary to help a client who is

considering appointing co-fiduciaries to make an

informed decision. This article focuses of the most

common types of co-fiduciaries: co-trustees, co-

executors/administrators, and co-agents. Any attempt

to properly identify the advantages and disadvantages

of naming co-fiduciaries must start with understanding

the relevant law applicable to each role. First, we

identify and discuss the three main sources of authority

which govern co-fiduciary’s duties, powers, and

liabilities: the governing instrument, the applicable

statutes, and the common law. Next, we discuss when

each respective co-fiduciary’s duties begin and identify

the basic fiduciary duties for each type of fiduciary and

the additional duties applicable to a co-fiduciary for

that type of role. We then outline the basic rules

governing decision making for each type of co-

fiduciary as well as the potential liability each

particular co-fiduciary faces for acts of other co-

fiduciary. After laying out the default rules for each

co-fiduciary, we identify the best drafting practices

when appointing co-fiduciaries, particularly how to

address particular issues which are a frequent source of

tension and dispute. Finally, we conclude our

discussion by identifying the advantages and

disadvantages of appointing co-fiduciaries.

II. CO-TRUSTEES

A. Section Overview

1. Key Points

• Attempting to determine a co-trustee’s precise

duty in any given context is complicated due to

the interplay between the terms of the Trust, the

Texas Trust Code, and the common law. The

actual trust instrument should always be carefully

considered – especially to the extent it may

modify the general rules applicable to co-trustees.

• Co-trustees are required to participate in the

administration of the trust unless the co-trustee is

unavailable (absence, illness, suspension,

disqualification or other temporary incapacity) or

has properly delegated the performance of his or

her function.

• Absent contrary terms in the Trust, co-trustees

should act jointly.

• A co-trustee generally cannot commit the entire

administration of the trust to another co-trustee.

• A co-trustee faces potential liability if a duty was

improperly delegated, if the co-trustee failed to

exercise reasonable care to prevent a co-trustee

from committing a serious breach of trust, and/or

if the co-trustee failed to exercise reasonable care

to redress a serious breach of trust.

• Co-trustees are jointly and severally liable if they

unite in a breach of trust.

2. Key Questions to Consider

• Does the settlor understand and appreciate the

level of communication and coordination

generally required for the co-trustees to act jointly

and the increased the costs of administering the

Trust?

• Are the co-trustees capable, from a practical

standpoint, of consistently cooperating?

• Are the co-trustees more likely to agree than

disagree?

• Are the co-trustees capable and willing to

consistently share information with each other?

• Will the co-trustees consistently and properly

document delegation?

• Will each co-trustee consistently exercise

reasonable care to prevent the other co-trustee

from committing a serious breach of trust?

• Will each co-trustee consistently exercise

reasonable care to compel a co-trustee to redress a

serious breach of trust?

• Is there really a need to appoint more than one co-

trustee? (Probably not).

B. Sources of Authority in Analyzing Co-Trustee

Issues

The nature and extent of any co-trustee’s duties,

powers, and liabilities are derived from three main

sources of authority: (1) the terms of the trust;

(2) the

Texas Trust Code;

and (3) the common law.

Texas

Trust Code Section 113.051 states that a trustee shall

administer a trust in good faith, according to its terms,

and the Texas Trust Code.

In the absence of any

contrary terms in the trust instrument or contrary

provisions of the Texas Trust Code, in administering

the trust, a trustee shall perform all of the duties

imposed on trustees by the common law.

Additionally, Texas Trust Code Section 111.0035(a)

states that, to the extent the terms of the trust do not

provide otherwise, the Texas Trust Code governs: the

duties and powers of a trustee; the relations among

trustees; and the rights and interests of a beneficiary.

These statutory mandates look something like this:

TEX. TRUST CODE § 113.051.

Id.

Id.; see also Katherine C. Akinc, Inside the Mind of a

Trustee; The Importance of Understanding a Trustee’s

Perspective, The 43

Annual Advanced Estate Planning &

Probate Course, 3 (2019).

TEX. TRUST CODE § 113.051.

Id.

TEX. TRUST CODE § 111.0035(a).

Drafting for Multiple Executors, Trustees, and Agents Chapter 13

Good Faith

Absent

Contrary

Terms

Absent

Contrary

TTC

Provisions

Trust Terms Do Not

Provide Otherwise

= Common Law

= TTC governs: (a)

duties and powers

of trustee; (b)

relations among

trustees; and (c) the

rights and interests

of a beneficiary

Thus, the starting point for determining any trustee’s

duties are the terms of the applicable trust instrument.

The Trust will be construed to ascertain the intent of

the settlor.

The settlor’s intent must be ascertained

from the language used within the four corners of the

instrument.

Texas Trust Code Section 111.004(15)

actually defines a trust’s “terms” as “the manifest

intent of the settlor.” A trustee’s “duties arise from the

wording of the trust instrument.”

With rare

exceptions, the “terms of a trust prevail over any

provision of” the Texas Trust Code.

TEX. TRUST CODE § 113.051.

Id.

TEX. TRUST CODE § 111.0035(a).

Eckels v. Davis, 111 S.W.3d 687, 694 (Tex. App.—Fort

Worth 2003, pet. denied); Nowlin v. Frost Nat’l Bank, 908

S.W.2d 283, 286 (Tex. App.—Houston [1st Dist.] 1995, no

writ).

Id. citing Shriner’s Hosp. for Crippled Children of Tex. v.

Stahl, 610 S.W.2d 147, 151 (Tex. 1980) (applying this

concept to construe a will).

Tolar v. Tolar, 2015 WL 2393993, at *4 (Tex. App.—

Tyler May 20, 2015, no pet.) (terms of the trust did not

require trustee to correct flaws in the initial conveyance of

trust property; trustee owed no duty to contribute her own

property to the trust).

TEX. TRUST CODE § 111.0035(a) and (b); see also TEX.

TRUST CODE §§ 114.007(c) (a settlor, by the terms of the

trust, may relieve the trustee from any duty or restriction

imposed by the Texas Trust Code or by common law or may

permit the trustee to do or not to do an action that would

otherwise violate a duty or restriction imposed by the Texas

Trust Code or by common law); T

EX. TRUST CODE §

113.029(a)(a trustee must act “in accordance with the terms

and purposes of the trust”).

C. Co-Trustee Fiduciary Duties

1. When a Co-Trustee’s Fiduciary Duties Begin

It is very common for two or more co-trustees to

not start their roles at the exact same time. Thus, each

person appointed as a co-trustee must know when his

or her duties begin. Generally, a person named as

trustee who does not accept the trust incurs no liability

with respect to the trust.

However, “the signature of

the person named as trustee on the writing evidencing

the trust or on a separate written acceptance is

conclusive evidence that the person accepted the

trust.”

Moreover, the Texas Trust Code states that,

“a person named as trustee who exercises power or

performs duties under the trust is presumed to have

accepted the trust, except that a person named as

trustee may engage in the following conduct without

accepting the trust:

(1) acting to preserve the trust property if, within

a reasonable time after acting, the person

gives notice of the rejection of the trust to:

(A) the settlor; or

(B) if the settlor is deceased or

incapacitated, all beneficiaries then

entitled to receive trust distributions

from the trust; and

(2) inspecting or investigating trust property for

any purpose, including determining the

potential liability of the trust under

environmental or other law.

A person named as trustee who does not accept the

trust incurs no liability with respect to the trust.

2. Each Co-Trustee Owes Fiduciary Duties

It is well-established under Texas law that a

fiduciary relationship exists between a trustee and the

trust beneficiary.

The Texas Trust Code defines the

term “trustee” as “the person holding the property in

trust, including an original, additional, or successor

trustee, whether or not the person is appointed or

confirmed by a court.”

Consequently, co-trustees

each occupy the same fiduciary relationship as to the

trust’s beneficiaries — each owes fiduciary duties. A

trustee owes, as a matter of law and fact, all of those

TEX. TRUST CODE § 112.009(b).

TEX. TRUST CODE § 112.009(a).

TEX. TRUST CODE § 112.009(b).

Herschbach v. City of Corpus Christi, 883 S.W.2d 720,

735 (Tex. App.—Corpus Christi 1994, writ denied).

TEX. TRUST CODE § 111.004(18) (emphasis added).

Drafting for Multiple Executors, Trustees, and Agents Chapter 13

common law fiduciary duties and statutory duties

imposed through such relationship, including: the duty

to administer the trust in good faith, according to its

terms, and the Texas Trust Code;

the duty of

loyalty;

the duty of full disclosure of all material

facts that might affect the beneficiaries' rights,

(which

is not lessened by strained relations between the

parties);

the duty to account generally;

the duty to

Ali v. Smith, 554 S.W.3d 755, 762 (Tex. App.—Houston

[14th Dist.] 2018, no pet.)(“The fiduciary duty that an

executor or administrator owes to the estate is derived from

the statutes and common law.”); T

EX. EST. CODE § 351.001

(“The rights, powers, and duties of executors and

administrators are governed by common law principles to

the extent that those principles do not conflict with the

statutes of this state.”).

TEX. TRUST CODE § 113.051.

Slay v. Burnett Trust, 143 Tex. 621, 640, 187 S.W.2d 377,

388 (1945)(“The trustee’s duty of loyalty [prohibits] him

from using the advantage of his position to gain any benefit

for himself at the expense of his cestui que trust and from

placing himself in any position where his self-interest will or

may conflict with his obligations as trustee.”);

TEX. TRUST

CODE § 114.001 (“The trustee is accountable to a

beneficiary for the trust property and for any profit made by

the trustee through or arising out of the administration of the

trust, even though the profit does not result from a breach of

trust.”);

TEX. TRUST CODE § 117.007 (“A trustee shall

invest and manage the trust assets solely in the interest of the

beneficiaries.”); Nathan v. Hudson, 376 S.W.2d 856, 860

(Tex. Civ. App.—Dallas 1964, writ ref’d n.r.e) (“equity

demands of a fiduciary the highest duty of loyalty”); AUSTIN

WAKEMAN SCOTT & WILLIAM FRANKLIN FRATCHER, The

Law of Trusts Section 170 (4th ed. 1987) (the duty of loyalty

to a trust’s beneficiaries is considered the “most fundamental

duty owed by the trustee to the beneficiaries of the trust ...”);

ESTATEMENT (THIRD) OF TRUSTS § 78 (2007).

Huie v. DeShazo, 922 S.W.2d 920 (Tex. 1996) (a trustee

owes his or her beneficiaries “a fiduciary duty of full

disclosure of all material facts known to them that might

affect [the beneficiaries’] rights.”); See also T

EX. TRUST

CODE § 113.151(a) (requiring trustee to account to

beneficiaries for all trust transactions).

Lesikar v. Rappeport, 33 S.W.3d 282, 296 (Tex. App.—

Texarkana 2000, pet. denied) (citing Montgomery v.

Kennedy, 669 S.W.2d 309, 313 (Tex. 1984).

See TEX. TRUST CODE §§ 113.151 and 113.152;

ESTATEMENT (THIRD) OF TRUSTS § 83 (2007) (“A trustee

has a duty to maintain clear, complete, and accurate books

and records regarding the trust property and the

administration of the trust, and, at reasonable intervals on

request, to provide beneficiaries with reports or

accountings.”); Corpus Christi Bank & Tr. v. Roberts, 587

S.W.2d 173, 181 (Tex. Civ. App.—Corpus Christi 1979),

aff’d, 597 S.W.2d 752 (Tex. 1980) (“A trustee is charged

with the duty of maintaining an accurate account of all of the

transactions relating to the trust property. He is chargeable

with all assets coming into his hands, the disposition for

which he cannot account.”); Republic Nat. Bank & Tr. Co. v.

Bruce, 130 Tex. 136, 140, 105 S.W.2d 882, 885 (Comm’n

maintain records;

the fundamental duty to use the

skill and prudence which an ordinary capable and

careful person will use in the conduct of his own

affairs;

the duty of care;

the duty to exercise

discretion reasonably;

the duty of impartiality;

the

App. 1937) (“The relation of a trustee to the trust estate is

personal and one of confidence. He handles another’s

property. The law ought and does demand of him a strict

accounting to the letter and spirit of his contract. It tolerates

no deviation therefrom which amounts to a breach of his

agreement.”) (internal citations omitted).

Beaty v. Bales, 677 S.W.2d 750, 754 (Tex. App.—San

Antonio 1984, writ ref’d n.r.e.) (a trustee is required to keep

full, accurate, and orderly records concerning the status of

the trust estate and of all acts performed thereunder);

OGERT’s, THE LAW OF TRUSTS AND TRUSTEES § 961 (At a

minimum, “the trustee’s records must be [in such a form] as

to allow it to furnish the beneficiaries (and the court, if

required or otherwise called upon to do so), all information

about its administration of the trust that the beneficiaries

need to protect their interests (or the court needs to

determine whether the trustee has properly administered the

trust.)”).

InterFirst Bank Dallas, N.A. v. Risser, 739 S.W.2d 882,

888 (Tex. App.—Texarkana 1987, no writ), disapproved of

on other grounds by Tex. Commerce Bank, N.A. v. Grizzle,

96 S.W.3d 240 (Tex. 2002); R

ESTATEMENT (THIRD) OF

TRUSTS § 77 (2007).

See Jewett v. Capital Nat. Bank of Austin, 618 S.W.2d

109, 112 (Tex. Civ. App.—Waco 1981, writ ref’d n.r.e.) (“a

trustee can exercise his fiduciary duty in such a negligent

manner that his lack of diligence will result in a breach of

his fiduciary duty.”); Ertel v. O’Brien, 852 S.W.2d 17, 21

(Tex. App.—Waco 1993, writ denied) (“a trustee commits

breach of trust not only where he violates a duty in bad faith,

or intentionally although in good faith, or negligently but

also where he violates a duty because of a mistake.”);

Republic Nat. Bank & Tr. Co. v. Bruce, 130 Tex. 136, 140,

105 S.W.2d 882, 885 (Comm’n App. 1937) (“Every

violation by a trustee of a duty which equity lays on him,

whether willful or forgetful, is a breach of trust, for which he

is liable”) (internal citations omitted); Lipsitz v. First Nat.

Bank, 288 S.W. 609, 612 (Tex. Civ. App.—Eastland 1926),

aff’d, 293 S.W. 563 (Tex. Comm’n App. 1927), modified,

296 S.W. 490 (Tex. Comm’n App. 1927) (“Equity holds a

trustee liable for every violation of a duty laid upon him,

though such violation arises through oversight or

forgetfulness.”) (internal citations omitted).

State v. Rubion, 158 Tex. 43, 51, 308 S.W.2d 4, 9 (1957)

(“The discretion with which a trustee of a support trust is

clothed in determining how much of the trust property shall

be made available for the support of the beneficiary and

when it shall be used is not an unbridled discretion . . . He

may not act arbitrarily in the matter, however pure may be

his motives . . . His discretion must be reasonably exercised

to accomplish the purposes of the trust according to the

settlor’s intention and his exercise thereof is subject to

judicial review and control”).

See Perfect Union Lodge v. Interfirst Bank of San Antonio,

713 S.W.2d 391 (Tex.App.—San Antonio 1986), affirmed,

748 S.W.2d 218 (Tex. 1988)(where will created a

Drafting for Multiple Executors, Trustees, and Agents Chapter 13

duty to collect, preserve and protect the assets of the

trust;

the duty to exercise reasonable care, skill and

caution in selecting agents, establishing the scope and

terms of any delegation of authority, and periodically

reviewing the agent’s actions;

the duty, upon the

event of trust termination, to expeditiously make

terminating distributions to the beneficiaries entitled to

receive them;

the duty not to misapply fiduciary

funds and property and not to self-deal

or commingle

assets,

liabilities, or accounts (including those of

testamentary trust with one lifetime beneficiary and a

different remainder beneficiary, trustee must deal impartially

with the two beneficiaries); Brown v. Scherck, 393 S.W.2d

172 (Tex. Civ. App.—Corpus Christi 1965, no

writ)(testamentary trustees owe duty to protect the interests

of the minor contingent beneficiaries, as well as administer

the lifetime beneficiaries’ interests). See also R

ESTATEMENT

(2D) OF TRUSTS §§ 183 (if there are two or more

beneficiaries of a trust, the trustee must deal impartially with

them); 232 (if a trust is created for beneficiaries in

succession, the trustee has a duty to act with due regard to

their respective interests).

Hoenig v. Texas Commerce Bank, N.A., 939 S.W.2d 656

(Tex. App.—San Antonio 1996, reh’g overruled and Rule

130(d) motion) (trustee who failed to discover the existence

of trust property, to include it in the trust inventory, to make

the beneficiaries aware of it and to collect rent for its use,

breached its fiduciary duty); Tucker v. Dougherty Roofing

Co., 137 S.W.2d 884, 887 (Tex. Civ. App.—Dallas 1940,

writ dism’d judgm’t cor.) (“The trustee, however, has the

power, as well as the duty, to make expenditures or incur

indebtedness for whatever repairs and changes are

reasonably necessary to the preservation of the property for

the purposes for which it was placed in trust.”) (internal

citations omitted); R

ESTATEMENT (SECOND) OF TRUSTS §

175 (1959); R

ESTATEMENT (SECOND) OF TRUSTS § 176.

TEX. TRUST CODE § 117.011.

TEX. TRUST CODE § 112.052.

Slay v. Burnett Tr., 143 Tex. 621, 640, 187 S.W.2d 377,

388 (1945) (“It is a well-settled rule that a trustee can make

no profit out of his trust. The rule in such cases springs from

his duty to protect the interests of the estate, and not to

permit his personal interest to in any wise conflict with his

duty in that respect. The intention is to provide against any

possible selfish interest exercising an influence which can

interfere with the faithful discharge of the duty which is

owing in a fiduciary capacity.”) (quoting Magruder v.

Drury, 235 U.S. 106, 35 S.Ct. 77, 82, 59 L.Ed. 151, 156

(1914).

RESTATEMENT (THIRD) OF TRUSTS § 84 (2007) (“a trustee

has a duty not to commingle property of the trust with the

trustee’s own property.”); see also Moody v. Pitts, 708

S.W.2d 930, 937 (Tex. App.—Corpus Christi 1986, no writ)

(“If a trustee commingles trust funds with the trustee’s own,

the entire commingled fund is subject to the trust . . . [w]hen

a trustee has commingled funds and has expended funds, the

money expended is presumed to be the trustee’s own.”)

(internal citations omitted); Eaton v. Husted, 163 S.W.2d

439, 444 (Tex. Civ. App.—Texarkana 1942), aff’d, 141 Tex.

349, 172 S.W.2d 493 (1943) (“If a man mixes trust funds

himself or herself) and the duty not to seek or obtain,

for himself or herself, any secret, undisclosed benefits,

properties, assets, fees, commissions, payments,

discounts, profits, gains, advantages, dividends,

distributions, revenues, or other ownership interest;

and the duty not to engage in oppressive/hostile

conduct.

Moreover, “[a] trustee commits breach of trust not

only where he violates a duty in bad faith, or

intentionally although in good faith, or negligently[,]

but also where he violates a duty because of a

mistake.”

Subject to clear and specific limitations, a settlor

is free to draft and execute any trust terms the settlor

desires.

Frequently, settlors seek to establish limits

on the liability of his or her chosen trustee so that the

trustee may be unburdened by certain claims of

disgruntled, or even contingent, beneficiaries.

However, the Texas Trust Code prohibits the complete

and absolute exoneration and exculpation of a

fiduciary, and in doing so imposes a “floor” of

fiduciary conduct that even the settlor himself can

neither excuse nor exculpate. Any term of a trust

relieving the trustee of liability is unenforceable to the

extent that such term relieves the liability of a trustee

for a breach trust committed: (a) in bad faith; (b)

intentionally; or (c) with reckless indifference to the

interest of a beneficiary.

Each manner of breach of

trust requires a heightened mental attitude by the

trustee. Thus, for every trust in Texas, a trustee will be

liable for, at the very least, breaches of trust the trustee

committed in bad faith, intentionally, or with reckless

with his own * * * the whole will be treated as trust

property, except so far as he may be able to distinguish what

is his own.”) (internal citations omitted).

See e.g., TEX. TRUST CODE § 113.082(a)(4)’s “other cause

for removal” and the case thereunder which interprets same

to include ill-will or hostility between a trustee and the

beneficiary or other close family members of that

beneficiary. Akin v. Dahl, 661 S.W.2d 911 (Tex. 1983),

cert. denied, 466 U.S. 938 (1984); Barrientos v. Nava, 94

S.W.3d 270 (Tex. App.—Houston [14

Dist.] 2002, no pet.)

(hostility toward beneficiaries’ close family member

justified removal and appointment of another person as the

successor trustee).

Ertel v. O’Brien, 852 S.W.2d 17, 21 (Tex. App.—Waco

1993, writ denied).

See e.g. TEX. TRUST CODE §§ 111.0035, 112.031

(prohibiting the creation of a trust for an illegal purpose),

114.007 (prohibiting the complete exculpation of a trustee),

1110.035(b)(3) (prohibiting the modification of certain

limitations periods), 1110.035(b)(4) (prohibiting the

modification of the duty to respond to a demand for

accounting or act in accordance with the trust purpose(s)),

and other express limitations on the settlor’s creativity and

ability to deviate from specific provisions of the Texas Trust

Code.

TEX. TRUST CODE § 114.007(a).

Drafting for Multiple Executors, Trustees, and Agents Chapter 13

indifference to the interest(s) of a beneficiary. Any

trust provision relieving the trustee of liability is

strictly construed.

A trustee is relieved of liability

only to the extent that the trust instrument clearly

provides that she shall be excused.

Finally, 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.

3. Duty to Participate

Many lay persons believe one co-trustee will

“naturally” do most of the work and the other co-

trustee can sit on the sidelines unless and until

“something happens.” The estate planner should dispel

this myth. Both co-trustees are required to participate

and, as discussed below, a co-trustee who wishes to

take a secondary rule must follow specific rules to

properly delegate his or her duties.

A co-trustee has a statutory duty to participate in

the performance of a trustee’s function.

The

Restatement (Third) of Trusts § 81 states: “If a trust

has more than one trustee, except as otherwise

provided by the terms of the trust, each trustee has a

duty and the right to participate in the administration of

the trust.”

Additionally, “except as otherwise

provided by the terms of the trust, each co-trustee has a

duty, and also the right, of active, prudent participation

in the performance of all aspects of the trust's

administration. Implicit in this requirement of prudent

participation is a duty of reasonable cooperation among

the trustees.”

The duty to participate in administration of the

trust contemplates proper delegation and some level of

cooperation, but it does not require an equal level of

effort or activity:

Neuhaus v. Richards, 846 S.W.2d 70 (Tex. App.—Corpus

Christi 1992, writ granted) (vacated pursuant to settlement

on other grounds, Richards v. Neuhaus 871 S.W.2d 182

(Tex. 1994)).

Id. at 75; Jewett v. Capital National Bank of Austin, 618

S.W.2d 109, 112 (Tex. Civ. App.—Waco 1981, writ ref’d

n.r.e.).

TEX. TRUST CODE § 114.007(b).

TEX. TRUST CODE § 113.085.

RESTATEMENT (THIRD) OF TRUSTS § 81 (2007).

RESTATEMENT (THIRD) OF TRUSTS § 81 (2007), cmt. c; see

also Ball v. Mills, 376 So.2d 1174, 1182 (Fla. App. 1979)

(“co-trustees owe to each other, as well as to the

beneficiaries of the trust, the duty and obligation to so

conduct themselves as to foster a spirit of mutual trust,

confidence, and cooperation to the extent possible. At the

same time, the trustees should maintain an attitude of

vigilant concern for the proper administration or protection

of the trust business and affairs.”).

RESTATEMENT (THIRD) OF TRUSTS, § 81 (2007), cmt. c.

. . . the duty of participation by each of the

co-trustees does not prevent them from

deciding (short of constituting delegation) to

allow one or more of the co-trustees to carry

more of the burden in regard to various

matters, for example, by initiating, analyzing,

reporting, and making recommendations for

reasonably informed action by all of the

trustees.

A co-trustee's duty to participate in administering the

trust “does, however, normally prevent the trustees

from “dividing” the trusteeship or its functions in a

manner that is not authorized by the terms of the

trust.”

Under the Texas Trust Code, a co-trustee’s duty to

participate in the performance of a trustee’s function

applies unless (1): the co-trustee is unavailable to

perform the function because of absence, illness,

suspension under this code or other law,

disqualification, if any, under this code,

disqualification under other law, or other temporary

incapacity;

or (2) the co-trustee properly and

permissibly delegated the performance of its function

to another trustee.

The delegation must be made in accordance with

the terms of the trust or applicable law, be

communicated to all other co-trustees, and be filed in

the records of the trust.

Delegation is not allowed if

the settlor specifically directs that the function be

performed jointly.

Additionally, unless a co-trustee's

delegation is irrevocable, the co-trustee making the

delegation may revoke the delegation.

4. Duty to Disclose By and Among Co-Trustees

As a corollary to the duty of a co-trustee to

participate actively in the administration of the trust

and the duty to redress any breach of trust, one

authoritative treatise in the area of trust law has stated

that “a co-trustee, particularly one empowered to

exercise greater control or having greater knowledge of

trust affairs, [has a duty] to inform each co-trustee of

Id.

TEX. TRUST CODE § 113.085(c)(1).

See TEX. TRUST CODE § 113.085 (c); see also

ESTATEMENT (THIRD) OF TRUSTS § 81 (2007)(“If a trust

has more than one trustee, except as otherwise provided by

the terms of the trust, each trustee has a duty and the right to

participate in the administration of the trust. Each trustee

also has a duty to use reasonable care to prevent a co-trustee

from committing a breach of trust and, if a breach of trust

occurs, to obtain redress.”)

TEX. TRUST CODE § 113.085(c).

TEX. TRUST CODE § 113.085(e).

Id.

Drafting for Multiple Executors, Trustees, and Agents Chapter 13

all material facts that have come to his attention and

that are relevant to the administration of the trust.”

These duties exist and arise independently of whether

the other co-trustee’s decision-making vote matters:

Even though a majority of the trustees may

be authorized, by statute or by the trust

instrument, to act for all trustees, the duty to

inform arises from the basic duties of every

trustee to comply with the trust terms, to see

that the trust is properly executed, and to

redress any breach of trust. Thus each trustee

is entitled to access to trust records, to notice

of trustees' meetings, and to participate in all

decisions affecting administration of the

trust.

Another trust authority, L

ORING AND ROUNDS: A

TRUSTEE’S HANDBOOK, offers the following

hypothetical to illustrate a co-trustee’s duty to stay

informed:

When co-trustee 1 is uncertain as to whether

co-trustee 2 is reliable, co-trustee 1 should

request from co-trustee 2 all the information

that co-trustee 1 would need to make that

determination. Co-trustee 2 would have a

correlative duty of full disclosure. If the

requested information is not forthcoming,

e.g., co-trustee 2 unreasonably refuses to

hand over vouchers that would support

certain expenses that co-trustee 2 has paid

from the trust estate, then co-trustee 1 would

be well advised to retain independent counsel

to assist with the investigation. If counsel is

unable to extract the information, then the

matter of co-trustee 2’s reliability will have

to be put before the court. Regardless of the

outcome of the litigation, co-trustee 2 clearly

has breached the duty to keep co-trustee 1

fully informed. Accordingly, the court at a

minimum can be expected to hold co-trustee

2 personally liable for co-trustee 1’s

reasonable attorney’s fees.

D. Decision Making by Co-Trustees

At common-law, co-trustees had to act

unanimously: “The traditional rule, in the case of

private trusts, was that if there were two or more

trustees, all had to concur in the exercise of their

BOGERT’S THE LAW OF TRUSTS AND TRUSTEES § 584,

Duty of co-trustee to be active.

Id.

Charles E. Rounds, Jr. et. al, LORING AND ROUNDS: A

TRUSTEE’S HANDBOOK, § 7.2.4 (2021 ed.).

powers.”

Absent contrary terms in the governing

Trust instrument,

the Texas Trust Code provides that

co-trustees “may act” by majority decision.

This

language suggests that, unlike coexecutors, co-trustees

cannot generally act independently unless the

instrument provides otherwise.

In other words, co-

trustees must act as a group.

Disagreements between co-trustees can rise to

such a level that prevents any action and the co-trustees

are essentially deadlocked. As one practitioner has

recently noted, the Texas Trust Code does not provide

an easy solution to deadlocked co-trustees” and “does

not explain what happens when there is a deadlock

between an even number of co-trustees.”

THE

RESTATEMENT (THIRD) OF TRUSTS states the answer in

such a situation is the for the co-trustees to seek court

instructions: “if a situation arises in which prudence

requires that the trustees reach a decision and they are

unwilling or unable to do so, the trustees have a duty to

apply to an appropriate court for instructions.”

The Texas Declaratory Judgments Act provides

that: “A person interested as or through … a trustee …

3 SCOTT AND ASHER ON TRUSTS, WHEN POWERS

EXERCISABLE BY SEVERAL TRUSTEES, § 18.3; see also

ESTATEMENT (THIRD) OF TRUSTS, cmt. a (“[I]f there are

three or more trustees their powers may be exercised by a

majority.”).

See Berry v. Berry, 646 S.W.3d 516, 530 (Tex. 2022)

(“The Trust Agreement could have altered this rule, but it

does not. Instead, Section 5.2 of the Trust Agreement states

that the Code shall apply “as fully as though its provisions

were written into this instrument.” The result is that the

trustees “act by majority decision.” Tex. Prop. Code §

113.085(a).”)

TEX. TRUST CODE § 113.085(a); see also RESTATEMENT

(THIRD) OF TRUSTS § 81 (2007), cmt. a (“[I]f there are three

or more trustees their powers may be exercised by a

majority.”).

Compare TEX. TRUST CODE § 113.085 with TEX. EST.

CODE § 307.002; see also Shellberg v. Shellberg, 459

S.W.2d 465, 470 (Civ. App.—Fort Worth 1970, ref. n.r.e.)

(“The trust instrument conveyed the property to two trustees

and provided that their powers were joint; the management,

control and operation of the trust was to be by the joint

action of the two trustees.”).

BOGERT’S THE LAW OF TRUSTS AND TRUSTEES § 554

(“The powers of trustees of a private trust, whether they are

imperative or discretionary, personal or attached to the

office, are held jointly, in the absence of statute or contrary

direction in the trust instrument. The trustees are regarded as

a unit. They are joint tenants of realty in the usual case. They

hold their powers as a group so that their authority can be

exercised only by the action of all the trustees. ‘When the

administration of a trust is vested in co-trustees, they all

form but one collective trustee.’”).

David F. Johnson, The More the Merrier? Issues Arising

from Co-Trustees Administering Trusts, 45

Annual

Advanced Estate Planning & Probate (2021), 20.

RESTATEMENT (THIRD) OF TRUSTS § 81 (2007), cmt. c.

Drafting for Multiple Executors, Trustees, and Agents Chapter 13

may have a declaration of rights or legal relations in

respect to the trust or estate: … (2) to direct the

executors, administrators, or trustees to do or abstain

from doing any particular act in their fiduciary

capacity; (3) to determine any question arising in the

administration of the trust or estate, including

questions of construction of wills and other

writings...”

Additionally, the Texas Trust Code states

that a court has jurisdiction “over all proceedings by or

against a trustee and all proceedings concerning trusts,

including proceedings to: (1) construe a trust

instrument; (2) determine the law applicable to a trust

instrument; … (4) determine the powers,

responsibilities, duties, and liability of a trustee; … (6)

make determinations of fact affecting the

administration, distribution, or duration of a trust; (7)

determine a question arising in the administration or

distribution of a trust; (8) relieve a trustee from any or

all of the duties, limitations, and restrictions otherwise

existing under the terms of the trust instrument or of

this subtitle…”

Consequently, co-trustees are authorized to seek

court instruction where they are deadlocked on an

important decision. “This remedy, however, has its

drawbacks in that it is expensive and also there is

necessary delay involved in filing suit, joining in

proper or necessary parties, presenting the issue to the

court, and obtaining a final ruling.”

Co-trustees should carefully consider their

positions when deadlock appears likely or has already

occurred. A co-trustee who takes a position that is

especially unreasonable or refuses to participate or

reasonably cooperate, risks removal.

The Texas

Trust Code provides that: (a) A trustee may be

removed in accordance with the terms of the trust

instrument, or, on the petition of an interested person

and after hearing, a court may, in its discretion, remove

a trustee and deny part or all of the trustee’s

compensation if: (1) the trustee materially violated or

attempted to violate the terms of the trust and the

violation or attempted violation results in a material

financial loss to the trust; (2) the trustee becomes

incapacitated or insolvent; (3) the trustee fails to make

an accounting that is required by law or by the terms of

the trust; or (4) the court finds other cause for

removal.

TEX. CIV. PRAC. & REM. CODE § 37.005.

TEX. TRUST CODE § 115.001.

David F. Johnson, The More the Merrier? Issues Arising

from Co-Trustees Administering Trusts, 45

Annual

Advanced Estate Planning & Probate (2021), 21.

David F. Johnson, The More the Merrier? Issues Arising

from Co-Trustees Administering Trusts, 45

Annual

Advanced Estate Planning & Probate (2021), 21.

TEX. TRUST CODE § 113.082.

A receivership is another option to break a

deadlock. The Texas Trust Code authorizes

establishing a receivership to remedy a breach of trust

that has occurred or may occur: “(a) To remedy a

breach of trust that has occurred or might occur, the

court may: … (5) appoint a receiver to take possession

of the trust property and administer the trust.”

Alternatively, co-trustees may seek declaratory relief

as to the validity of a decision by the majority of the

co-trustees under the decision-making process set forth

in the trust instrument.

E. Co-Trustees Liability for Acts of Other Co-

Trustee

In addition to facing liability for his or her own

conduct, a co-trustee can be liable for the

acts/omissions of the other co-trustee(s). In deciding to

appoint co-trustees, rarely does a settlor understand

that he or she is asking a family member to take on

fiduciary duties plus additional duties. Whether and to

what extent a duty has been properly delegated is a

highly technical analysis. Similarly, it may be hard to

determine in certain factual circumstances whether a

co-trustee has properly complied with his or her duty

of care to prevent another co-trustee from committing a

serious breach of trust or to redress a breach of trust

which has already occurred. These risks and

uncertainties should be addressed with a settlor any

time appointing co-trustees is being contemplated.

1. Improper Delegation

As noted, a trustee cannot properly commit the

entire administration of the trust to an agent or other

person, except as permitted to do so by the terms of the

trust.

Analyzing whether any delegation was

appropriate requires a careful review of the terms of

the trust, since “the terms of the trust may permit a

trustee to delegate to agents or other persons (e.g., a

co-trustee) the administration of the trust or the

performance of acts that could not otherwise properly

be delegated.”

Although the administration of a trust

may not typically be delegated in full, a trustee may

delegate fiduciary authority for a variety of purposes to

properly selected, instructed, and supervised or

monitored agents.

TEX. TRUST CODE § 114.008.

Duncan v. O’Shea, 2020 WL 4773058, at *1 (Tex. App. –

Amarillo Aug. 17, 2020, no pet.) (holding trial court

properly granted co-trustee’s requires for a declaration that a

majority of the co-trustees had the power to sell real

property of the trust over objection of dissenting co-trustee

according to the terms of the trust and applicable law).

RESTATEMENT (THIRD) OF TRUSTS § 80, cmt. c (2007).

RESTATEMENT (THIRD) OF TRUSTS § 80, cmt. h (2007).

RESTATEMENT (THIRD) OF TRUSTS § 80 (2007).

Drafting for Multiple Executors, Trustees, and Agents Chapter 13

The Texas Trust Code allows a trustee to delegate

to a co-trustee the performance of a trustee's function

unless the settlor specifically directs that the function

be performed jointly.

The delegation must be made in

accordance with the terms of the trust or applicable

law, be communicated to all other co-trustees, and be

filed in the records of the trust.

The trustee may also have a duty to monitor. For

example, the Texas Trust Code permits a trustee to

delegate the investment and management functions that

a prudent trustee of comparable skills could properly

delegate under the circumstances.

However, in that

instance, the trustee shall exercise reasonable care,

skill, and caution in, among things, “periodically

reviewing the agent's actions in order to monitor the

agent's performance and compliance with the terms of

the delegation.”

2. Failure to Exercise Reasonable Care

Texas Trust Code § 114.006 addresses the liability

of co-trustees for the acts of other co-trustees. Texas

Trust Code § 114.006(b) imposes an affirmative duty

on each trustee to exercise reasonable care to prevent a

co-trustee from committing a serious breach of trust.

COTT & ASHER ON TRUSTS, discusses the duty to

supervise a co-trustee’s conduct:

All trustees are under a duty to participate in

the administration of the trust and to use

reasonable care to prevent co-trustees from

committing breaches of trust. Even in the

absence of improper delegation, a trustee

who, by failing to exercise reasonable care in

supervising the conduct of a co-trustee,

allows the co-trustee to commit a breach of

trust is liable. Thus, a trustee who permits a

co-trustee to have sole custody of the trust

property may be liable if the later

misappropriates it. So also, if a trustee has

reason to suspect that a co-trustee is

committing or attempting to commit a breach

of trust and does not take reasonable steps to

prevent the co-trustee from so doing, and the

trustee commits a breach of trust, both are

liable.

Under the Texas Trust Code, a trustee who does not

join in an action of a co-trustee is not liable for the co-

trustee's action, unless the trustee failed to exercise

TEX. TRUST CODE § 113.085(e).

TEX. TRUST CODE § 113.085(c).

TEX. TRUST CODE § 117.011(a).

TEX. TRUST CODE § 117.011(a)(3).

TEX. TRUST CODE § 114.006(b).

4 SCOTT AND ASHER ON TRUSTS, When Powers

Exercisable by Several Trustees,

§ 24.29.

reasonable care.

The same rule essentially applies to

a dissenting and reluctant co-trustee: a dissenting

trustee who joins in an action at the direction of the

majority of the trustees and who has notified any co-

trustee of the dissent in writing at or before the time of

the action is not liable for the action, unless such

dissenting co-trustee failed to exercise reasonable

care.

These rules incentivize co-trustees to not only

stay informed about the administration of the trust, but

also to voice their objections at or before the time the

act to which they disagree is taken.

3. Failure to Redress Breach of Trust

Texas Trust Code § 114.006(b) imposes an

affirmative duty on each trustee to exercise reasonable

care to compel a co-trustee to redress a serious breach

of trust.

Even a dissenting co-trustee must exercise

reasonable care: a dissenting trustee who joins in an

action at the direction of the majority of the trustees

and who has notified any co-trustee of the dissent in

writing at or before the time of the action is not liable

for the action, unless such dissenting co-trustee failed

to exercise reasonable care.

For example, the

dissenting trustee would be liable if he or she was

aware that the action was a breach of trust and failed to

exercise reasonable care to redress it.

4. Joint and Several Liability

“If several trustees unite in a breach of trust, they

are jointly and severally liable and the entire claim of

the beneficiary may be satisfied from the property of

one trustee.”

F. Co-Trustee Succession

Texas Trust Code § 113.085 provides, “If a

vacancy occurs in a cotrusteeship, the remaining co-

trustees may act for the trust.” Thus, the remaining

trustee or co-trustees may administer the trust without

filling the vacancy unless the instrument provides

TEX. TRUST CODE § 114.006(a).

TEX. TRUST CODE § 114.006(c).

TEX. TRUST CODE § 114.006(b).

TEX. TRUST CODE § 114.006(c).

RESTATEMENT (THIRD) OF TRUSTS § 81, cmt. e (2007) (“A

trustee who opposed an action taken upon decision by a

majority of the trustees, and who made that opposition

known to a co-trustee but thereafter reasonably joined in the

action in order to avoid obstructing its execution, is not

liable for the action unless the dissenting trustee was aware

that the action was a breach of trust.”).

BOGERT’S THE LAW OF TRUSTS AND TRUSTEES § 862,

Degree Against the Trustee for the Payment of Money -

Damages; R

ESTATEMENT (THIRD) OF TRUSTS § 102,

Liability of Multiple Trustees; Contribution (2012); 4 S

COTT

& ASHER § 24.29, Liability for Co-Trustee’s Breach of

Trust.

Drafting for Multiple Executors, Trustees, and Agents Chapter 13

otherwise.

From there, Texas Trust Code Section

112.009 states, “If the person named as the original

trustee does not accept the trust or if the person is dead

or does not have capacity to act as trustee, the person

named as the alternate trustee under the terms of the

trust or the person selected as alternate trustee

according to a method prescribed in the terms of the

trust may accept the trust. If a trustee is not named or if

there is no alternate trustee designated or selected in

the manner prescribed in the terms of the trust, the

court shall appoint a trustee on a petition of any

interested person.”

III. CO-EXECUTORS/ADMINISTRATORS

A. Section Overview

1. Key Points

• Attempting to determine a co-

executors/administrator’s precise duty in any

given context is complicated due to the interplay

between the terms of the Will, the Texas Estates

Code and the common law. The actual will

should always be carefully considered – especially

to the extent it may modify the general rules

applicable to co-executors/administrators.

• Co-executors/administrators are generally

required to participate in the administration of the

Estate – especially in filing an inventory,

appraisement and list of claims, or affidavit in lieu

thereof — otherwise, the non-joining co-

executor/administrator risks losing his or her

powers.

• Is delegation authorized under the terms of the

will, the Texas Trust Code or the common law?

• Absent contrary terms in the will, co-

executors/administrators may act independently,

except when conveying real property.

• A co-executor/administrator probably cannot

commit the entire administration of the estate to

another co-executor/administrator and faces

potential liability if the co-executor/administrator

was negligent or failed to exercise reasonable

care.

2. Key Questions to Consider

• Does the testator understand and appreciate that

the level of communication and coordination that

will generally be required for the co-

executors/administrators to act properly will

increase the costs of administering the estate?

• Are the co-executors/administrators capable, from

a practical standpoint, of consistently

cooperating?

TEX. TRUST CODE § 113.085(b).

TEX. TRUST CODE § 112.009(c).

• Are the co-executors/administrators more likely to

agree than disagree?

• Are the co-executors/administrators capable and

willing to consistently share information with

each other?

• Will the co-executors/administrators consistently

and properly document delegation?

• Will each co-executors/administrator prevent or

redress known breaches of duty?

• In addition to complying with their own fiduciary

duties, will each co-executor/administrator act

with reasonable care to ensure that the other co-

executors/administrator is performing his or her

fiduciary duties?

• Is there really a need to appoint more than one co-

executors/administrator? (Probably not).

B. Sources of Authority in Analyzing Co-

Executor/Administrator Issues

The nature and extent of any co-

executor/administrator’s duties, powers, and liabilities

are derived from three main sources of authority: the

will;

the applicable statutes; and common law.

Texas law has long held that “as trustee of the

property of the estate, the executor is subject to the

high fiduciary standards applicable to all trustees.”

Despite this tenant, the standards set forth in the Texas

Trust Code do not necessarily apply – unless the will

expressly states that the executor is governed by the

provisions of the Texas Trust Code.

This can be an

incredibly nuanced analysis. For example, some wills

may incorporate the Texas Trust Code with respect to

the powers of the executor or may go further and state

something like the “executor shall have and exercise

all of the applicable rights, powers and privileges

granted in this will to the Trustees of the Trust created

TEX. ESTATES CODE § 22.034 (defining “Will” to include:

(1) a codicil; and (2) a testamentary instrument that

merely:(A) appoints an executor or guardian; (B) directs

how property may not be disposed of; or (C) revokes another

will).

Ali v. Smith, 554 S.W.3d 755, 762 (Tex. App.—Houston

[14th Dist.] 2018, no pet.) (the fiduciary duty that an

executor or administrator owes to the estate is derived from

the statutes and common law).

Humane Soc’y of Austin & Travis Cty. v. Austin Nat’l

Bank, 531 S.W.2d 574, 577 (Tex. 1975); Mims-Brown v.

Brown, 428 S.W.3d 366, 374 (Tex. App.—Dallas 2014, no

pet.) (“The fiduciary duties of an executor of an estate are

the same as the fiduciary duties of a trustee.”)

Humane Soc. of Austin & Travis Cnty. v. Austin Nat.

Bank, 531 S.W.2d 574, 577 (Tex. 1975) (“Even though the

Texas Trust Act is not applicable, the executor of an estate is

held to the same fiduciary standards in his administration of

the estate as a trustee.”).

Drafting for Multiple Executors, Trustees, and Agents Chapter 13

herein,”

or “the executor’s powers, duties and

liabilities are governed by the standards that apply to

trustees under the Texas Trust Code.” If the provisions

of the Texas Trust Code do not apply, then the

fiduciary duties of the executor are defined by the

common law standards for trustees as long as the

standards do not conflict with statutory law.

Whether the common law “conflicts” with

statutory law is not always easy to determine.

Moreover, the common law may not apply even if such

is law is “inconsistent” with the Texas Estates Code.

100

As one treatise observes, “The common law is

displaced not only by direct conflicts with statutes but

also when courts interpret a statute more broadly than

its plain language.”

101

The common law has also been

abrogated, “not because of a conflict with a provision

of Texas law, but because of the absence of a specific

statute on point.”

102

Another commentator warns, “Due

to the comprehensive statutory scheme set out in the

Texas Estates Code, the statute has virtually no

relevance to the estate practice and is rarely cited.”

103

Corpus Christi Nat. Bank v. Gerdes, 551 S.W.2d 521, 523

(Tex. Civ. App.—Corpus Christi 1977, writ ref’d n.r.e.).

See TEX. ESTATES CODE § 351.001 (stating that “the

rights, powers, and duties of executors and administrators

are governed by common law principles to the extent that

those principles do not conflict with the statutes of this

state); O’C

ONNOR’S TEXAS PROBATE LAW HANDBOOK Ch.

5-A § 3 (2022 ed.).

100

Roberts v. Stewart, 80 Tex. 379, 387, 15 S.W. 1108, 1111

(1891) (while common law gave named executor

considerable power of estate before the will was admitted to

probate, statutory requirement of the issuance of letters

testamentary meant that before the issuance of such letters,

the designated executor had no power over, and therefore no

responsibility for, the estate property).

101

2 TEXAS PROBATE, ESTATE AND TRUST ADMINISTRATION

§ 30.01 (2021).

102

Id. (citing In re Guardianship of Neal’s Estate, 406

S.W.2d 496, 501 (Tex. Civ. App.—Houston 1966), writ

ref’d n.r.e. sub nom. In re Guardianship of Neal, 407 S.W.2d

770 (Tex. 1966) (common law would have allowed guardian

to make gifts ward would have made if competent but the

Probate Code must be construed in conjunction with other

statutory provisions which set out more specifically what a

guardian may do and by implication what a guardian may

not do in the management of the ward’s estate; no specific

statute authorized the type of gift guardian wanted to make))

(emphasis added).

103

JOHANSON’S TEXAS ESTATES CODE, Commentary to §

351.101 (West 2022); In re Guardianship of Estate of Neal,

406 S.W.2d 496, 500 (Tex. App.— Houston 1966), writ

ref’d n.r.e., 407 S.W.2d 770 (Tex. 1966) (discussing Probate

Code §32, now Estates Code §351.001 and noting “by its

silence denies [by] implication the exercise by the Probate

Court of equitable powers. But even if the words, ‘principles

of the common law,’ are construed to include equitable

powers, [§32] does not grant to the court common law

powers…”).

Still, in some contexts, Texas courts have relied on the

common-law when determining an executors powers

and/or liability.

104

The will may impose additional duties or limit the

duties of an executor/administrator.

105

“The source of

the executor's power to act is the will.”

106

Generally, an

executor or administrator has a duty to comply fully

with the terms of the will,

107

and must carefully

consider the terms of the will in administering the

Estate.

108

In some instances, the Texas Estates Code

controls over the terms of a will.

109

On the other hand,

104

Altgelt v. Alamo Nat. Bank, 98 Tex. 252, 262, 83 S.W. 6,

9-10 (1904) (discussing predecessor statute to T

EX. EST.

CODE § 351.101 and noting certain statute in effect at the

time dealing with the continuation of a business did not

apply to the continuation of a partnership; instead common

law rule prohibiting executor from continuing a partnership

applied); see also Benton v. Martin, 244 S.W.2d 930, 934

(Tex. Civ. App.—Fort Worth 1951, no writ) (relying on the

common law which allowed executor, through a voluntary

conveyance on the part of an heir, to acquire full title when

based on full, fair and adequate consideration and where the

executor has not concealed or withheld information or made

any false or fraudulent representations in reference to the

value of the property to support sale in spite of statute

generally prohibiting an executor to purchase estate

property).

105

Shriner’s Hosp. for Crippled Children of Tex. v. Stahl,

610 S.W.2d 147, 148 - 150 (Tex. 1980) (discussing the

doctrine of ademption — the extinction of a specific bequest

or devise because of the disappearance of or disposition of

the subject matter given from the estate of the testator in his

lifetime — and stating, absent a contrary intention

expressed in the will, the alienation or disappearance of the

subject matter of a specific bequest from the testator’s estate

adeems the devise or bequest).

106

Ali v. Smith, 554 S.W.3d 755, 762 (Tex. App.—Houston

[14th Dist.] 2018, no pet.); see also Jackson v. Cato, 156

S.W.2d 302, 305 (Tex. Civ. App.—Amarillo 1941, writ ref’d

w.o.m.), writ refused W.O.M. (Dec. 31, 1941) (“An executor

obtains his authority from the probate law and the provisions

of the will and is restricted to such authority as he so

obtains”).

107

See Bilek v. Tupa, 549 S.W.2d 217, 222 (Tex. Civ.

App.—Corpus Christi 1977, writ ref’d n.r.e.); See e.g.

Pendleton v. Hare, 231 S.W. 334, 337 (Tex. Comm’n App.

1921) (will governs the distribution of the estate).

108

See e.g. Pendleton v. Hare, 231 S.W. 334, 337 (Tex.

Comm’n App. 1921)(will governs the distribution of the

estate); Boyles v. Gresham, 153 Tex. 106, 112, 263 S.W.2d

935, 938 (Tex. 1954)(“The will is but the expression of the

desire of and direction by the testator as to what shall be

done with the property left by him”).

109

TEX. ESTATES CODE § 254.005 (forfeiture clauses

generally will not be construed to prevent a beneficiary from

seeking to compel a fiduciary to perform the fiduciary’s

duties, seeking redress against a fiduciary for a breach of the

fiduciary’s duties, or seeking a judicial construction of a will

or trust).

Drafting for Multiple Executors, Trustees, and Agents Chapter 13

there are many instances where the Texas Estates Code

gives deference to the terms of a will.

110

Unlike the Texas Trust Code, there is no provision

in the Texas Estates Code which expressly permits the

exoneration of executors from liability. Many Texas

Estate Code Sections detailing an executor’s duties do

not contain exceptions for good faith acts

111

mistaken acts, and there are no Texas cases squarely

addressing the issue of whether an executor may be

exonerated from liability.

112

Likewise, the common

law does not absolve an executor for breaching his or

her fiduciary duties in good faith or by mistake.

113

Finally, the Texas Trust Code imposes limits on how

far a settlor may go in exculpating a trustee —

specifically, that a trustee may not be exculpated for a

breach of trust committed in bad faith, intentionally, or

with a reckless indifference to the interest of the

110

See e.g. TEX. ESTATES CODE § 310.003 (dealing with the

allocation of expense to principal unless the will provides

otherwise); T

EX. ESTATES CODE § 355.109 (a decedent’s

intent expressed in a will controls over the abatement of

bequests provided by 355.109); T

EX. ESTATES CODE §

254.006 (statute granting executor or other person power to

designate administrator and specifying those instances

where the person may serve unless the will provides

otherwise); T

EX. ESTATES CODE § 255.152 (statute

discussing scheme for failed devises do not apply to

charitable bequests unless the will provides otherwise); T

EX.

ESTATES CODE § 305.101 (a person to whom letters

testamentary or of administration will be issued must enter

into a bond before issuance of the letters unless the will

directs that no bond or security be required of the person);

EX. ESTATES CODE § 356.652 (allowing a personal

representative to purchase estate property if the will

expressly authorizes the sale).

111

See e.g. TEX. ESTATES CODE §§ 101.003, 351.102,

351.101; Estate of Boylan, 2015 WL 598531, at *4 (Tex.

App.—Fort Worth Feb. 12, 2015, no pet.)(relying on the

common law applicable to trustees, and noting the fact that

an act was taken in “good faith” was not a viable defense to

claim executor breached his fiduciary duty); see also Jewett

v. Capital Nat. Bank of Austin, 618 S.W.2d 109, 112 (Tex.

Civ. App.—Waco 1981, writ ref’d n.r.e.)(a trustee can

exercise his fiduciary duty in such a negligent manner that

his lack of diligence will result in a breach of his fiduciary

duty).

112

C.f. In re Estate of Hughes, 2014 WL 222922, at *5 (Tex.

App.—Corpus Christi–Edinburg Jan. 16, 2014, pet.

denied)(exculpatory provision of the will did not abrogate

statutory authority or the inherent power of the trial court to

remove an executor who misapplied estate funds).

113

Estate of Boylan, 2015 WL 598531, at *4 (Tex. App.—

Fort Worth Feb. 12, 2015, no pet.)(good faith is not a

defense to a breach of fiduciary duty); Ertel v. O’Brien, 852

S.W.2d 17, 21 (Tex. App.–Waco 1993, writ denied) (“A

trustee commits breach of trust not only where he violates a

duty in bad faith, or intentionally although in good faith, or

negligently but also where he violates a duty because of a

mistake”).

beneficiary.

114

Similarly, a trustee may not be relieved

of liability for any profit derived by the trustee from a

breach of trust.

115

C. Co-Executor/Administrator Fiduciary Duties

1. When a Co-Executor/Administrator’s Duties

Begin

An executor or administrator “has no title to or

authority over the estate until the will is probated and

he qualif[ies] as directed by statute.”

116

Once

appointed, and after qualifying, an

executor/administrator’s duties begin. Under Texas

law, “upon the death of the testator as well as the

intestate, the estate vests in the legatees under a will or

the heirs of the intestate; “but, upon the issuance of

letters testamentary or of administration upon any such

estate, the executor or administrator shall have the right

to the possession of the estate.”

117

Texas Estates Code

Section 101.003 provides in relevant part that, “[o]n

the issuance of letters testamentary or of administration

on an estate . . . the executor or administrator has the

right to possession of the estate as the estate existed at

the death of the testator or intestate” and “[t]he

executor or administrator shall recover possession of

the estate and hold the estate in trust to be disposed of

in accordance with the law.” Texas case law

establishes that before the will is admitted to probate

and the executor or administrator qualifies, the person

named as executor or administrator cannot be held

liable for breaching any duties: “Until probate of the

will and qualification as executor, [the executor] could

not be charged with neglect of reducing personal

property to possession, for the simple reason that [the

executor] had no right to it.”

118

2. Each Co-Executor/Administrator Owes Fiduciary

Duties

It is well-established in Texas that the relationship

between a personal representative and the estate's

beneficiaries is one that gives rise to a fiduciary duty as

a matter of law.

119

Thus, each co-

executor/administrator assumes the same fiduciary

duties that a singular executor/trustee does. The Texas

Estates Code defines a “personal representative” to

include: (1) an executor and independent executor; (2)

an administrator, independent administrator, and

114

TEX. TRUST CODE § 114.007.

115

Id.

116

Roberts v. Stewart, 80 Tex. 379, 387, 15 S.W. 1108, 1110

(1891).

117

Id.; see also TEX. EST. CODE §§ 101.001, 101.003.

118

Roberts v. Stewart, 80 Tex. 379, 387, 15 S.W. 1108, 1111

(1891).

119

See Huie v. DeShazo, 922 S.W.2d 920, 923 (Tex.1996);

Punts v. Wilson, 137 S.W.3d 889, 891 (Tex. App.–

Texarkana 2004).

Drafting for Multiple Executors, Trustees, and Agents Chapter 13

temporary administrator; and (3) a successor to an

executor or administrator listed in subsection (1) or

(2).

120

The fiduciary standards of an executor of an

estate are the same as the fiduciary standards of a

trustee.

121

Note, however, those standards may not

include statutory provisions found in the Texas Trust

Code. There is at least some authority suggesting that

unless the will specifically states that the personal

representative is governed by the provisions in the

Texas Trust Code, the fiduciary duties are defined by

the common-law standards for trustees so long as they

do not conflict with statutory law.

122

Texas courts have long emphasized the special

nature of the fiduciary duties owed by an executor

and/or administrator:

[The Independent Executor] manages [Estate

assets] under an equitable obligation to act

for the others' benefit and not his own. He is

a “fiduciary” of whom the law requires an

unusually high standard of ethical or moral

conduct in reference to the beneficiaries and

their interests. His “duties” are more than the

ordinary “duties” of the marketplace. They

connote fair dealing, good faith, fidelity, and

integrity. He may have additional duties that

he would not have in an ordinary business

relation—a duty of full disclosure, for

example, and a duty not to use the fiduciary

relationship for personal benefit except with

the full knowledge and consent of the

beneficiaries.

123

An executor owes, as a matter of law and fact, all of

those common law fiduciary duties and statutory

duties

124

imposed through such relationship, including:

the strict duty of good faith and candor, as well as the

general duty of full disclosure respecting matters

120

TEX. EST. CODE § 22.031.

121

Humane Society, etc. v. Austin Nat’l Bank, 531 S.W.2d

574, 577 (Tex.1975), cert. denied, 425 U.S. 976, 96 S.Ct.

2177, 48 L.Ed.2d 800 (1976).

122

O’CONNOR’S TEXAS PROBATE LAW HANDBOOK Ch. 5-A

§ 3.1.1, Duties (2022 ed.) (citing Humane Soc’y v. Austin

Nat’l Bank, 531 S.W2d 574, 577 (Tex. 1975)).

123

Geeslin v. McElhenney, 788 S.W.2d 683, 684–85 (Tex.

App.—Austin 1990, no writ).

124

Ali v. Smith, 554 S.W.3d 755, 762 (Tex. App.—Houston

[14th Dist.] 2018, no pet.) (“The fiduciary duty that an

executor or administrator owes to the estate is derived from

the statutes and common law.”); T

EX. EST. CODE § 351.001

(“The rights, powers, and duties of executors and

administrators are governed by common law principles to

the extent that those principles do not conflict with the

statutes of this state.”).

affecting the beneficiaries' interests;

125

the duty of

care;

126

the duty not to delegate acts that the executor is

required to personally perform;

127

the duty to maintain

books of account showing all income of the estate

being administered, as well as all items of expense paid

out on behalf of the estate;

128

the duty of

competence;

129

the duty to comply fully with the terms

of the will;

130

the duty to collect, preserve and protect

the Estate’s properties, and to reduce to possession all

properties belonging to the Estate;

131

the duty to fully

account for the Estate’s assets;

132

the duty to file

125

Lesikar v. Rappeport, 33 S.W.3d 282, 296 (Tex. App.—

Texarkana 2000, pet. denied); Punts v. Wilson, 137 S.W.3d

889, 891 (Tex. App.—Texarkana 2004, no pet.) (“the

fiduciary duties owed to the beneficiaries of an estate by an

independent executor include a duty of full disclosure of all

material facts known to the executor that might affect the

beneficiaries’ rights.”).

126

TEX. EST. CODE § 351.101 (“An executor or

administrator of an estate shall take care of estate property as

a prudent person would take of that person’s own property,

and if any buildings belong to the estate, the executor or

administrator shall keep those buildings in good repair,

except for extraordinary casualties, unless directed by a

court order not to do so.”); Mohseni v. Hartman, 363 S.W.3d

652, 656–57 (Tex. App.—Houston [1st Dist.] 2011, no

pet.)(stating T

EX. EST. CODE § 351.101 codifies common

law duty holding the executor has a fiduciary duty to

exercise reasonable care in the administration of the

estate property); Estate of Boylan, 2015 WL 598531, at *4

(Tex. App.—Fort Worth Feb. 12, 2015, no pet.) (executor

required to exercise the judgment and care that persons of

ordinary prudence, discretion, and intelligence exercise in

the management of their own affairs).

127

See Doherty v. Jpmorgan Chase Bank, N.A., 2010 WL

1053053, at *5 (Tex. App.—Houston [1st Dist.] Mar. 11,

2010, no pet.) (trustee’s duty of discretion is non-delegable);

Richardson v. McCloskey, 261 S.W. 801, 807 (Tex. Civ.

App.—Austin 1924), rev’d, 276 S.W. 680 (Tex. Comm’n

App. 1925) (executors essentially left property management

to bookkeeper; improper conduct did not entitle executors to

compensation).

128

Walling v. Hubbard, 389 S.W.2d 581, 589 (Tex. Civ.

App.—Houston 1965, writ ref’d n.r.e.), writ dismissed w.o.j.

(Nov. 3, 1965), writ refused NRE (Nov. 3, 1965).

129

TEX. EST. CODE § 351.101.

130

See Bilek v. Tupa, 549 S.W.2d 217, 222 (Tex. Civ.

App.—Corpus Christi 1977, writ ref’d n.r.e.).

131

Id.; Scott v. Taylor, 294 S.W. 227, 234 (Tex. Civ. App.—

Amarillo 1927, no writ); Bandy v. First State Bank, Overton,

Tex., 835 S.W.2d 609, 623 (Tex. 1992)

(“The administrator has a fiduciary duty to preserve the

assets of the estate.”); see also T

EX. EST. CODE § 351.102.

132

Sierad v. Barnett, 164 S.W.3d 471, 480 (Tex. App.—

Dallas 2005, no pet.) (once assets are traced to

executor/administrator’s hands and the amount of loss is

shown, the burden is on executor/administrator to account

for any claims or expenses as reasonable and necessary or to

otherwise account for the loss, or loss of value, in the

assets).

Drafting for Multiple Executors, Trustees, and Agents Chapter 13

proper inventories and accountings;

133

the duty not to

commingle Estate assets;

134

the duty to only pay claims

that are just, legal and correct and otherwise proper;

135

the duty of loyalty;

136

the duty of impartiality;

137

the

duty not to misapply fiduciary funds and property and

not to self-deal

138

or commingle assets, liabilities, or

accounts (including those of himself or herself) and the

duty not to seek or obtain, for himself or herself, any

secret, undisclosed benefits, properties, assets, fees,

commissions, payments, discounts, profits, gains,

advantages, dividends, distributions, revenues, or other

ownership interest; the duty not to engage in

oppressive/hostile conduct;

139

and the duty to timely

administer

140

and close the Estate.

141

Doubts are

resolved against the executor or administrator where he

133

TEX. EST. CODE §§ 309.051 and 309.052; Garcia v.

Garcia, 878 S.W.2d 678, 680 (Tex. App.—Corpus Christi

1994, no writ) (when fiduciary fails to file proper inventories

and accounts, burden on fiduciary to show validity of

deductions from assets).

134

Punts v. Wilson, 137 S.W.3d 889, 892 (Tex. App.—

Texarkana 2004, no pet.) (“When an independent executor

takes the oath and qualifies in that capacity, he or she

assumes all duties of a fiduciary as a matter of law which, in

addition to other duties, includes the duty to avoid

commingling of funds.”).

135

See e.g., Scott v. Taylor, 294 S.W. 227, 230 (Tex. Civ.

App.—Amarillo 1927, no writ).

136

Estate of Boylan, 2015 WL 598531, at *4 (Tex. App.—

Fort Worth 2015, no pet.).

137

See TEX. TRUST. CODE § 117.008.

138

Mims-Brown v. Brown, 428 S.W.3d 366, 374 (Tex.

App.—Dallas 2014, no pet.) (“As a fiduciary, an executor

has a duty to protect the beneficiaries’ interest by fair

dealing in good faith with fidelity and integrity . . .[the

executor’s] personal interests may not conflict with his

fiduciary obligations to the estate.”); Humane Soc. of Austin

& Travis County v. Austin Nat. Bank, 531 S.W.2d 574, 577

(Tex. 1975); Geeslin v. McElhenney, 788 S.W.2d 683, 684–

85 (Tex. App.—Austin 1990, no writ).

139

See e.g., TEX. TRUST CODE § 113.082(a)(4)’s “other

cause for removal” and the case thereunder which interprets

same to include ill-will or hostility between a trustee and the

beneficiary or other close family members of that

beneficiary. Akin v. Dahl, 661 S.W.2d 911 (Tex. 1983),

cert. denied, 466 U.S. 938 (1984); Barrientos v. Nava, 94

S.W.3d 270 (Tex. App.—Houston [14

Dist.] 2002, no pet.)

(hostility toward beneficiaries’ close family member

justified removal and appointment of another person as the

successor trustee).

140

Estate of Sakima, 2019 WL 4267766, at *3 (Tex. App.—

Dallas 2019, no pet.) (trial court did not err in removing

administrator who allowed estate administration to languish

for over 7 years and failed to file proper estate accountings).

141

Sierad v. Barnett, 164 S.W.3d 471, 480 (Tex. App.—

Dallas 2005, no pet.) (noting administrator had fiduciary

duty to timely close the Estate).

or she has been careless in the performance of his or

her duties.

142

3. Duty to Participate

When co-executors/administrators qualify, each

takes an oath to “well and truly perform all the duties

of executor/administrator of the estate of the

deceased.”

143

Unless co-executors/administrators have

the authority to delegate their duties to others, or unless

the will expressly divides up the duties among the

appointed co-executors/administrators, all co-

executors/administrators are required to participate in

the administration of the estate.

144

From a practical

standpoint, however, co-executors/administrators do

not always walk in lock step. Frequently, one co-

executor/administrator assumes the lion share of the

role. Although there is no express statutory provision

in the Texas Trust Code allowing an executor to

delegate duties to a co-executor, such delegation may

be authorized to the extent the will incorporates the

Texas Trust Code. If the will does not incorporate the

Texas Trust Code, “then the common-law delegation

142

Scott v. Taylor, 294 S.W. 227, 230 (Tex. Civ. App.—

Amarillo 1927, no writ)(“Where an administrator, as in this

case, has been careless and negligent in his accounts and in

performing the duties required by the statutes, such as filing

his annual report, taking, preserving, and presenting

vouchers, and in closing the estate at the end of three years

from the date of his appointment, and when such

carelessness is apparent from the face of the report when

filed and the report is so obscure and confused that the

services of an expert accountant are required to audit it, the

rule is that if there is any reasonable doubt as to whether the

administrator is entitled to a credit, such doubt will be

resolved against him.”).

143

TEX. EST. CODE § 305.051 and 351.052.

144

O’CONNOR’S TEXAS PROBATE LAW HANDBOOK Ch. 5-A

§ 3, Duties (2022 ed.); Lesikar v. Rappeport, 33 S.W.3d 282,

296 (Tex. App.—Texarkana 2000, pet. denied) (“As both

co-executrices and beneficiaries, each owed the other a

fiduciary duty, and each was entitled to the other’s fulfilling

her fiduciary obligations.”); T

EX. EST. CODE §

351.101(mandating that an executor or administrator of an

estate shall take care of estate property as a prudent person

would take of that person’s own property

TEX. EST. CODE §

351.102 (stating that immediately after receiving letters

testamentary or of administration, the personal

representative of an estate shall collect and take possession

of the estate’s personal property, record books, title papers,

and other business papers); T

EX. EST. CODE §

351.151(providing that if there is a reasonable prospect of

collecting the claims or recovering the property of an estate,

the personal representative of the estate shall use ordinary

diligence to: (1) collect all claims and debts due the estate;

and (2) recover possession of all property to which the estate

has claim or title); Brown v. Fore, 12 S.W.2d 114, 116 (Tex.

Comm’n App. 1929) (one executor is entitled to maintain a

suit against his coexecutor upon a claim alleged to be due by

him to the estate of the decedent).

Drafting for Multiple Executors, Trustees, and Agents Chapter 13

rules for trustees presumably apply because a personal

representative is considered a trustee of the decedent's

estate.”

145

A co-executor/administrator who abdicates

his responsibility and does nothing faces exposure

under common law principles.

146

Texas Estates Code § 307.002 — the general joint

personal representative statute which, with the

exception of conveying real property, authorizes co-

executors/administrators to act independently — does

not expressly address what would control in the face of

an apparent conflict between a will and the Texas

Estates Code. However, secondary sources suggest the

will would control:

Although there is little authority on the

question, there would seem to be no reason

why a testator could not require all, or any

specified number, of his personal

representatives to join in any type of action,

and it seems reasonable to believe the statute

was not designed to cover those cases where

a will makes some specific provision to the

contrary.

147

145

See e.g., O’CONNOR’S TEXAS PROBATE LAW HANDBOOK

Ch. 5-A § 3 Duties (2022 ed.); See also T

EX. EST. CODE §

351.001 (“The rights, powers, and duties of executors and

administrators are governed by common law principles to

the extent that those principles do not conflict with the

statutes of this state.”); R

ESTATEMENT (THIRD) OF TRUSTS §

81, cmt. c(1) (2007)(“The general duty of each co-trustee to

participate in performing the functions of the trusteeship

does not prevent delegation on a prudent basis between or

among themselves with respect to essentially ministerial

matters, such as the custody of trust property and the

implementation of decisions that have been made by proper

vote of the co-trustees . . . A trustee may also expressly

delegate responsibilities and authority to the remaining co-

trustee(s) in anticipation of the trustee’s unavailability due to

[absence, illness, or other temporary incapacity, or because

of disqualification under other law] . . . [and] in

circumstances in which adherence to the general rule . . .

would not be practical and prudent because of cost or

inefficiency, or even because delegation would be consistent

with the settlor’s expectations in designating, or providing

for appointment of, that co-trustee”).

146

See Jewett v. Capital Nat. Bank of Austin, 618 S.W.2d

109, 112 (Tex. Civ. App.—Waco 1981, writ ref’d n.r.e.)

(trustee who literally did nothing to administer the trust was

not relieved of its negligence in failing to review the trust

periodically and was not relieved of its negligence in failing

to diversify the corpus of the trust despite exculpatory

language).

147

18 TEX. PRAC., PROB. & DECEDENTS’ ESTATES § 702

Joint executors and administrators – Powers in general

(citing Anderson v. Stockdale, 62 Tex. 54, 60 (1884); Becker

v. Am. Nat. Bank, 286 S.W. 889 (Tex. Civ. App.—Austin

1926, no writ)); O’C

ONNOR’S TEXAS PROBATE LAW

HANDBOOK Ch. 5-A § 4, Powers (2022 ed.) (“The ability of

For example, this result may obtain “if the will adopts

or incorporates the Texas Trust Code, which requires

co-trustees to act by majority decision,” in which case,

“presumably all actions must be by majority

decision.”

148

4. Duty to Disclose by and Among Co-

Executors/Administrators

Although there is no express statute in the Texas

Trust Code requiring co-executors/administrators to

disclose all material facts that are relevant to the

administration the estate, such a duty may exist to the

extent the will incorporates the Texas Trust Code. If

the will does not incorporate the Texas Trust Code,

“then the common-law delegation rules for trustees

presumably apply because a personal representative is

considered a trustee of the decedent's estate.”

149

From

a practical standpoint, some level of disclosure is

required, especially with regard to filing the inventory,

appraisement and list of claims or affidavit in lieu

thereof

150

(which must be filed under oath and which

both co-executors/administrators should ideally

approve), and because both right to demand an

accounting from each co-executor or co-

administrator.

151

D. Decision Making by Co-

Executors/Administrators

Texas Estates Code § 307.002 deals with joint

executors or administrators and provides:

a corepresentative to act independently can be modified by

the terms of the will”).

148

O’CONNOR’S TEXAS PROBATE LAW HANDBOOK Ch. 5-A

§ 4, Powers (2022 ed.) (citing Wakeman, Performing a Pre-

Mortem Autopsy: How to Dissect a Will Someone Else

Drafted, Intermediate Estate Planning & Probate, State Bar

of Texas CLE, ch. 1 (2016)).

149

O’CONNOR’S TEXAS PROBATE LAW HANDBOOK Ch. 5-A

§ 3 Duties (2022 ed.); See also T

EX. EST. CODE § 351.001

(“The rights, powers, and duties of executors and

administrators are governed by common law principles to

the extent that those principles do not conflict with the

statutes of this state.”); B

OGERT’S THE LAW OF TRUSTS AND

TRUSTEES § 584, Duty of co-trustee to be active; Charles E.

Rounds, Jr. et. al, L

ORING AND ROUNDS: A TRUSTEE’S

HANDBOOK, § 7.2.4 (2021 ed.); RESTATEMENT (THIRD) OF

TRUSTS § 81, cmt. b (2007).

150

See TEX. EST. CODE § 309.055.

151

See Kelly v. Lobit, 142 S.W.2d 301, 303 (Tex. Civ.

App.—Galveston 1940, no writ)(“They were jointly and

severally required under the terms of said will to file an

inventory and a list of claims due said estate, and the

beneficiaries under said will had a right to demand an

accounting from each of them of their administration of said

estate as such executors”).

Drafting for Multiple Executors, Trustees, and Agents Chapter 13

(a) Except as provided by Subsection (b), if

there is more than one executor or

administrator of an estate at the same time,

the acts of one of the executors or

administrators in that capacity are valid as if

all the executors or administrators had acted

jointly. If one of the executors or

administrators dies, resigns, or is removed, a

co-executor or co-administrator of the estate

shall proceed with the administration as if the

death, resignation, or removal had not

occurred.

(b) If there is more than one executor or

administrator of an estate at the same time,

all of the qualified executors or

administrators who are acting in that capacity

must join in the conveyance of real estate

unless the court, after due hearing, authorizes

fewer than all to act.

This statue applies to all co-executors and/or co-

administrators, including those acting free of court

supervision.

152

Texas Estates Code § 307.002 sets

forth the general rule that if two or more persons are

serving as co-executors or co-administrators of an

estate, it is not necessary for them to act jointly. For

example, one co-executor may incur a debt on behalf

of the Estate, without the joinder of the other co-

executor(s).

153

Therefore, the act of one co-executor or

co-administrator is sufficient to bind the estate.

154

Indeed, the Texas Supreme Court has long held that

co-executors and co-administrators “are regarded in

law as one person, and consequently the acts of one of

them in respect to the administration are deemed to be

the acts of all, inasmuch as they have a joint and entire

authority over the whole property.”

155

Exception 1: Conveying Real Property. Texas

Estates Code § 307.002(b) requires co-executors or co-

152

See Primm v. Mensing, 14 Tex. Civ. App. 395, 396, 38

S.W. 382, 383 (1896, no writ) (applying these concepts set

forth in T

EX. EST. CODE § 307.002 to co-executors who were

authorized to manage the estate independently of the probate

court and without bond).

153

Id. (“J. B. L. Primm had the authority to incur the liability

alone, and without the necessity of joint action with his wife,

who was the only other executor acting at the time”).

154

Kelly v. Lobit, 142 S.W.2d 301, 303 (Tex. Civ. App.—

Galveston 1940, no writ) (“Each of said executors could

legally act without the joinder of the other in matters

pertaining to said estate, except in the sale of land, and the

act of each in connection with said estate was binding upon

the other.”).

155

Dean v. Duffield, 8 Tex. 235, 236 (1852) (claim presented

to, and rejected by, one of several administrators, was

sufficient to authorize the institution of suit to establish

same).

administrators to act jointly in conveying real property

— unless the court, after due hearing, authorizes fewer

than all to act. Co-executors or co-administrators must

also act jointly in entering into contracts to convey real

property.

156

Exception 2: The Will Provides Otherwise. A

testator can specify that a certain number of executors

are required to join in a decision, despite the default

provisions of Texas Estates Code § 307.002.

157

Additionally, co-executors or co-administrators

should also cooperate to file an inventory,

appraisement and claims, or affidavit in lieu thereof.

While one co-executor or co-administrator may file an

inventory, appraisement and list of claims, or affidavit

in lieu thereof, the co-executor or co-administrator who

“neglects to make or file an inventory, appraisement,

and list of claims or an affidavit in lieu of an inventory,

appraisement, and list of claims may not interfere with

and does not have any power over the estate after

another representative makes and files an inventory,

appraisement, and list of claims or an affidavit in lieu

of an inventory, appraisement, and list of claims.”

158

The only way to avoid being stripped of powers is for

the non-filing co-executor or co-administrator to file a

sufficient excuse within a limited time frame,

otherwise removal is mandatory:

The personal representative who files the

inventory, appraisement, and list of claims or

the affidavit in lieu of an inventory,

appraisement, and list of claims is entitled to

the whole administration unless, before the

61st day after the date the representative files

the inventory, appraisement, and list of

claims or the affidavit in lieu of an inventory,

appraisement, and list of claims, one or more

delinquent representatives file with the court

a written, sworn, and reasonable excuse that

the court considers satisfactory. The court

shall enter an order removing one or more

156

Heffington v. Gillespie, 176 S.W.2d 205, 210–11 (Tex.

Civ. App.—Fort Worth 1943, no writ) (“No further force or

effect can be given this contract merely because executor

Gillespie testified that executor Meadows left all such

matters to Gillespie and always executed all instruments that

Gillespie prepared . . . The courts are not, in our opinion,

permitted to speculate on the possibility, or the probability,

of the full and complete acquiescence of one executor who

has not contracted in writing to sell property belonging to

the estate in his hands, when such contract is executed by

only one executor and, in its executed condition, is not such

a contract as may be enforced in the courts.”).

157

Becker v. Am. Nat. Bank, 286 S.W. 889, 891 (Tex. Civ.

App.—Austin 1926, no writ).

158

TEX. EST. CODE § 309.055(b).

Drafting for Multiple Executors, Trustees, and Agents Chapter 13

delinquent representatives and revoking

those representatives' letters if: (1) an excuse

is not filed; or (2) the court does not consider

the filed excuse sufficient.

159

E. Co-Executor/Administrator Liability For Acts

of Other Co-Executor/Administrator

1. Failure to Exercise Reasonable Care

When it comes to co-executors/administrators,

there is a common horror story that occurs with some

frequency and goes something like this: Two people

are appointed as co-executors of an Estate. For a

variety of reasons, one of the co-executors takes the

lead, while the other co-executor takes a passive role.

After some time, the passive co-executor slowly drops

off the map, failing to participate in the day-to-day

affairs of the Estate and disappearing from

communications between the other co-executor and

professionals, like attorneys, CPAs, insurance agents,

and the Estate’s beneficiaries. Everything has been

handled and everything is fine, until one day, it’s not.

What the passive co-executor thought was done, was in

fact not done. The passive co-executor is named as a

defendant in a lawsuit brought by the Estate’s

beneficiaries. What is this passive co-executor’s fate?

The answer will largely depend on whether the co-

fiduciary participated in the wrongful conduct,

knowingly permitted or acquiesced to the wrongful

conduct, or negligently allowed the wrongful conduct

to occur. Texas case law establishes that co-

executors/administrators are liable for the misdeeds of

each other: “coadministrators, . . . stand as sureties for

each other . . . the one is responsible for the mal-

administration of the other.

160

However, it appears that

a co-executor/administrator must know, or have reason

to know, of such misdeeds to be held liable.

161

159

TEX. EST. CODE § 309.055(c).

160

Davis v. Thorn, 6 Tex. 482, 485 (1851)(“if one is in

possession of most of the assets of the estate, and is

misapplying and squandering them, the liability of the other

to be seriously injured is a sufficient ground for relief, on the

plain and acknowledged principles of equity

jurisprudence.”).

161

Lobit v. Marcoulides, 225 S.W. 757, 761 (Tex. Civ.

App.—Galveston 1920, writ ref’d)(co-executor not liable for

sums wrongfully obtained by other co-executor in breach of

prior agreement since he was not a party to the agreement,

had no knowledge of its execution, and there was no

evidence showing that he has received any property or

money as a result of the breach of the agreement and

wrongful acts of the other co-executor); Peter v. Beverly, 35

U.S. 532, 562, 9 L. Ed. 522 (1836)(“For it is a well settled

rule, that one executor is not responsible for the devastavit of

his co-executor, any farther than he is shown to have been

knowing and assenting at the time to such devastavit or

misapplication of the assets: and merely permitting his co-

executor to possess the assets; without going farther, and

concurring in the application of them; does not render him

2. Failure to Redress Breach of Duty

Similarly, an innocent co-executor/administrator

could be potentially liable for the misdeeds of another

executor/administrator if the innocent co-

executor/administrator was negligent or failed to

exercise reasonable care:

An important exception to the general rule of

nonliability has been raised in situations

where the fiduciary sought to be charged can

reasonably be regarded as guilty of

negligence. Such lack of care may inhere in

the manner in which the innocent fiduciary

permitted his cofiduciary to handle the

administration of the estate, in not

investigating suspicious conduct on the part

of such cofiduciary, in signing papers

tendered by the cofiduciary, or in

innumerable other ways. One important

aspect of the exception to nonliability raised

with respect to negligent fiduciaries is that

liability may be upheld despite the existence

of factors or considerations which normally

confirm the rule of nonliability, such as the

fact that the fiduciary charged has never had

possession or control of the assets of the

estate.

162

Because beneficiaries have a right to demand an

accounting from each co-executor/co-administrator, it

is important for them to stay informed and to

investigate any suspicious conduct of co-fiduciaries to

avoid being liable for negligently performing their

duties.

163

F. Co-Executor/Administrator Succession

Texas Estates Code § 307.002(a) makes it clear

that if one of the executors or administrators dies,

resigns, or is removed, a co-executor or co-

administrator of the estate shall proceed with the

administration as if the death, resignation, or removal

had not occurred – i.e., the remaining co-executor or

co-administrator may act alone. Effective September 1,

2019, a testator may delegate to an executor named in

the Will or to another person, the authority to designate

answerable for the receipts of his co-executor. Each executor

is liable only for his own acts, and what he receives and

applies, unless he joins in the direction and misapplication of

the assets.”)

162

See L. S. Tellier, Coexecutor’s, coadministrator’s, or

cotrustee’s liability for defaults or wrongful acts of fiduciary

in handling estate, 65 A.L.R.2

D 1019, §§ 2, 21 (Originally

published in 1959).

163

See Kelly v. Lobit, 142 S.W.2d 301, 303 (Tex. Civ.

App.—Galveston 1940, no writ).

Drafting for Multiple Executors, Trustees, and Agents Chapter 13

one or more persons to serve as administrator.

164

Unless the will provides otherwise, the person

designated may serve only if: (1) each named executor

is deceased, disqualified, or indicates by affidavit the

executor’s inability or unwillingness to serve; and (2)

the designation is in writing and properly

acknowledged; and (3) the person is not disqualified

from serving.

165

IV. CO-AGENTS

A. Section Overview

1. Key Points

• Attempting to determine a co-agent’s precise duty

in any given context is complicated due to the

interplay between the terms of the power of

attorney, the Texas Estates Code and the common

law. The actual power of attorney should always

be carefully considered – especially to the extent

it may modify the general rules applicable to co-

agents.

• Will both co-agents clearly “accept their

appointment,” so as to serve as co-agents in

unison?

• Is delegation authorized under the terms of the

power of attorney?

• Determining the precise scope of an agent’s duties

under a durable power of attorney, especially

those duties involving self-dealing and/or self-

interested transactions, is complex.

• What are the express terms and implied terms of

any durable power of attorney?

• What other “aspects of the relationship” need to

be considered to determine the nature of the

fiduciary duties owed by the agent?

• Absent contrary terms in the power of attorney,

co-agents may act independently.

• It is unclear as to whether a co-agent who has

accepted their appointment, especially one for an

incompetent principal, may let the other co-agent

manage the principal’s property and turn a blind

eye to the other co-agent’s acts/omissions.

2. Key Questions to Consider

• Does the principal understand and appreciate that

co-agents, by default, may act independently,

which impact, from a practical standpoint,

reliance on the power of attorney by third parties?

• If the durable power of attorney requires the

agents to act jointly, are the co-agents capable,

from a practical standpoint, of consistently

cooperating?

164

TEX. EST. CODE § 254.006(a).

165

TEX. EST. CODE § 254.006(c).

• If the durable power of attorney requires the

agents to act jointly, are the co-agents more likely

to agree than disagree?

• If the durable power of attorney provides that the

agents are required to act jointly, are the co-agents

capable and willing to consistently share

information with each other?

• If the durable power of attorney allows delegation,

will the co-agents consistently and properly

document delegation?

• Will each co-agent “take action reasonably

appropriate under the circumstances to safeguard

a principal’s best interest” when the co-agent has

actual knowledge of a breach or imminent breach

by another agent? What does this require?

• Does the law impose a duty on one co-agent to

investigate the acts/omissions of another co-agent,

particularly after both agents have accepted their

appointment and the principal is incompetent?

• Is there really a need to appoint more than one co-

agent or split authority under multiple agents?

B. Sources of Authority in Analyzing Co-Agent

Issues

With respect to durable powers of attorney, there

are three main sources of authority when analyzing co-

agency issues: (1) the terms of the durable power of

attorney; (2) the Durable Power of Attorney Act; and

(3) the common law. With limited exceptions, the

Durable Power of Attorney Act “applies to all durable

powers of attorney.”

166

C. Co-Agent Fiduciary Duties

The 2017 legislative changes to the Texas Durable

Power of Attorney Act (the “Act”), however, added

considerable complexity to determining the scope of an

agent’s powers and the duties owed by an agent to the

principal. For example, many sections contain multi-

layered exceptions and cross references to other

sections. It can thus be very difficult to easily ascertain

those circumstances by which an agent’s exercise of

authority is permitted (or not permitted).

The starting place to determine an agent’s duties

is the power of attorney. A power of attorney creates

an agency relationship.

167

Common-law agency

principles may be limited contractually.

168

An agent’s

duties of performance with respect to the principal are

166

TEX. EST. CODE § 751.0015.

167

See Vogt v. Warnock, 107 S.W.3d 778, 782 (Tex. App.—

El Paso 2003, pet. denied); In re Estate of Wallis, 2010 WL

1987514, at *4 (Tex. App.—Tyler 2010, no pet.); Sassen v.

Tanglegrove Townhouse Condominium Assoc., 877 S.W.2d

489, 492 (Tex. App.—Texarkana 1994, writ denied).

168

Nat’l Plan Adm’rs, Inc. v. Nat’l Health Ins. Co., 235

S.W.3d 695, 702 (Tex. 2007) (internal citations omitted).

Drafting for Multiple Executors, Trustees, and Agents Chapter 13

subject to the terms of the governing document.

169

Indeed, unless otherwise provided by statute or law,

duties owed by an agent to his principal may be altered

by agreement.

170

Accordingly, the agreements

between the agent and principal must be taken into

consideration when determining the scope of an agent's

fiduciary duty to his or her principal.

171

As the Texas

Supreme Court observed:

The Third Restatement carries forward the

principle that the parameters of an agency

relationship are to be established by the

agreement of the parties. According to the

Third Restatement, “[a]n agent has a duty to

act in accordance with the express and

implied terms of any contract between the

agent and the principal.” RESTATEMENT

(THIRD) OF AGENCY § 8.07 (2006). “This

section makes the basic point that an agent's

duties of performance to the principal are

subject to the terms of any contract between

them.” Id. cmt. a.

172

Despite implied terms informing an agent’s duties, no

Texas case has outlined the precise “implied terms” of

the statutory durable power of attorney. The Texas

Estates Code provides that “a person may use a

statutory durable power of attorney to grant an attorney

in fact or agent powers with respect to a person's

property and financial matters.”

173

The statutory

durable power of attorney form is found in Texas

Estates Code Section 752.051 (the “Statutory

DPOA”). The form is not exclusive and other forms of

power of attorney may be used.

174

The Statutory

DPOA primarily grants broad powers:

“I appoint _________ (insert the name and

address of the agent of the person appointed)

as my agent to act for me in any lawful way

169

Moore v. Estate of Moore, 2021 WL 3282158, at *4 (Tex.

App.—Amarillo July 30, 2021, no pet.)(citing Nat’l Plan

Adm’rs, Inc. v. Nat’l Health Ins. Co., 235 S.W.3d 695, 702

(Tex. 2007) (quoting R

ESTATEMENT (THIRD) OF AGENCY §

8.07 cmt. a (2006)) (“[A]n agent’s duties of performance to

the principal are subject to the terms of any contract between

them.”)).

170

In re Estate of Miller, 446 S.W.3d 445, 455 (Tex. App.—

Tyler 2014, no pet.) (citing Nat’l Plan Adm’rs, Inc., 235

S.W.3d at 700 (“[A]n agent’s duties of performance to the

principal are subject to the terms of any contract between

them.”).

171

Nat’l Plan Adm’rs, Inc., 235 S.W.3d at 700.

172

Id. at 702 (emphasis added).

173

TEX. EST. CODE § 752.001(a).

174

TEX. EST. CODE § 752.051.

with respect to all of the following powers

that I have initiated below.”

175

The bottom of the Statutory DPOA also includes a

section entitled, “Important Information for Agent,”

which warns the agent that when he or she “[accepts]

the authority granted under this power of attorney,” a

fiduciary relationship is established with the

principal.”

176

The instruction section further states that

“this is a special legal relationship that imposes on [the

agent] legal duties that continue until [the agent]

resign[s] or the power of attorney is terminated,

suspended, or revoked by the principal or by operation

of law.”

177

Finally, the instruction section informs the

agent that a fiduciary duty generally includes, among

other things, “the duty to: (1) act in good faith; (2) do

nothing beyond the authority granted in this power of

attorney; (3) act loyally for the principal's benefit; (4)

avoid conflicts that would impair your ability to act in

the principal's best interest.”

178

Additional factors which must be taken into

consideration when determining the scope of an agent's

fiduciary duty to his or her principal include the nature

and purpose of the relationship between the agent and

principal.

179

Even in an agency relationship, courts

take all aspects of the relationship into consideration

when determining the nature of fiduciary duties

flowing between the parties.

180

Moreover, tort duties — such as the duty of care,

competence and diligence — “will often overlap with

an agent's duties of performance that are express or

implied terms of a contract between principal and

agent.”

181

“Tort law imposes duties of care on an agent

because the agent undertakes to act on behalf of the

principal, because the principal's reliance on that

undertaking is foreseeable by the agent, and because it

is often socially useful that an agent fulfill the agent's

undertaking to the principal.”

182

The breach of a

fiduciary duty is a tort.

183

Finally, fiduciary duties are equitable in nature

and generally not subject to hard and fast rules.

184

the R

ESTATEMENT (THIRD OF AGENCY) emphasizes, “a

175

Id.

176

Id.

177

Id.

178

Id.

179

Nat’l Plan Adm’rs, Inc. v. Nat’l Health Ins. Co., 235

S.W.3d 695, 700 (Tex. 2007).

180

Id.

181

RESTATEMENT (THIRD) OF AGENCY § 8.08, cmt. b

(2006).

182

Id. (citing RESTATEMENT SECOND, TORTS § 323).

183

See BBVA Compass Inv. Sols., Inc. v. Brooks, 456 S.W.3d

711, 721 (Tex. App.—Fort Worth 2015, no pet.).

184

Nat’l Plan Adm’rs, Inc., 235 S.W.3d at 702 (citing Tex.

Bank & Trust Co. v. Moore, 595 S.W.2d 502, 508

(Tex.1980).

Drafting for Multiple Executors, Trustees, and Agents Chapter 13

relationship of agency is not the sole basis on which a

person may become subject to a fiduciary duty to

another person.”

185

For example, the principal and

agent may have also had an informal relationship of

trust and confidence.

186

Texas Estates Code Section

751.006 also provides that “the remedies under this

chapter are not exclusive and do not abrogate any right

or remedy under any law of this state other than this

chapter.”

“A fiduciary owes her principal a high duty of

good faith, fair dealing, honest performance, and strict

accountability.”

187

An agent generally owes, as a

matter of law and fact, all of those common law

fiduciary duties and statutory duties imposed through

such relationship, including: the duty to inform and to

account for actions taken under the power of

attorney;

188

the duty timely inform the principal of

each action taken under a durable power of attorney;

189

the statutory duty to maintain records of each action

taken or decision made by the agent;

190

the duty to

maintain all records until delivered to the principal,

released by the principal, or discharged by a court;

191

the duty to act within the scope of the authority

granted;

192

the duty “to act loyally for the principal’s

benefit in all matters connected with the agency

relationship;”

193

the duty to refrain, absent the

principal’s consent, from using his position or the

principal’s property to gain a benefit for himself at the

185

RESTATEMENT (THIRD) OF AGENCY § 8.01, cmt. c (2006).

186

Id. (“Moreover, a court may also determine that one

person’s relationship with another warrants the imposition of

fiduciary obligation to some degree on the basis that one

party to the relationship has in fact reposed trust and

confidence in the other and has done so consistently with the

other’s invitation”).

187

Estate of Wallis, 2010 WL 1987514, at *4 (Tex. App.—

Tyler 2010, no pet.) (mem. op.); see also R

ESTATEMENT

(SECOND) OF AGENCY § 387 (1957) (“Unless otherwise

agreed, an agent is subject to a duty to his principal to act

solely for the benefit of the principal in all matters connected

with his agency.”); R

ESTATEMENT (SECOND) OF AGENCY §

387 cmt. B (1957) (“The agent’s duty is not only to act

solely for the benefit of the principal in matters entrusted to

him, but also to take no unfair advantage of his position in

the use of information or things acquired by him because of

his position as agent or because of the opportunities which

his position affords…His duties of loyalty to the interests of

his principal are the same as those of a trustee to his

beneficiaries.”) (internal citations omitted).

188

TEX. EST. CODE § 751.101.

189

TEX. EST. CODE § 751.102.

190

TEX. EST. CODE § 751.103(a).

191

TEX. EST. CODE § 751.103(b).

192

RESTATEMENT (THIRD) OF AGENCY § 8.09 (2005).

193

In re Estate of Miller, 446 S.W.3d at 453 (citing

ESTATEMENT (THIRD) OF AGENCY § 8.01 (2006)).

principal’s expense;

194

the duty, unless otherwise

agreed, to act solely for the benefit of the principal in

all matters connected with his agency;

195

and the duty

to preserve the principal’s estate plan in certain

situations.

196

The existence and nature of an agency

relationship is generally a question of fact.

197

The

existence of a fiduciary duty presents a question of law

for the court.

198

1. When a Co-Agent’s Fiduciary Duties Begin

In 2017, the Texas Legislature amended Texas

Estates Code § 751.101 to clarify that “a person who

accepts appointment as an agent under a durable power

of attorney as provided by Section 751.022 is a

fiduciary as to the principal only when acting as an

agent under the power of attorney and has a duty to

inform and to account for actions taken under the

power of attorney.” Before a person may “act an

agent,” the person must first have “accepted their

appointment.” Tex. Estates Code § 751.022 provides:

Except as otherwise provided in the durable

power of attorney, a person accepts

appointment as an agent under a durable

power of attorney by exercising authority or

performing duties as an agent or by any other

assertion or conduct indicating acceptance of

the appointment (emphasis added).

194

Id. at 453 (citing Tex. Bank & Trust Co., 585 S.W.2d at

508-09); Mims-Brown v. Brown, 428 S.W.3d 366, 374 (Tex.

App.—Dallas 2014, no pet.); see also R

ESTATEMENT

(THIRD) OF AGENCY § 8.01 cmt. b (2006).

195

In re Estate of Miller, 446 S.W.3d at 453 (citing Johnson

v. Brewer & Pritchard, P.C., 73 S.W.3d 193, 200 (Tex.

2002) (quoting R

ESTATEMENT (SECOND) OF AGENCY § 387

(1958)).

196

TEX. EST. CODE § 751.122.

197

Brown & Brown of Tex., Inc. v. Omni Metals, Inc., 317

S.W.3d 361, 377 (Tex. App.—Houston [1st Dist.] 2010, pet.

denied); Novamerican Steel, Inc. v. Delta Brands, Inc., 231

S.W.3d 499, 511 (Tex. App.—Dallas 2007, no pet.).

198

Richard Nugent & CAO, Inc. v. Estate of Ellickson, 543

S.W.3d 243, 256 (Tex. App.—Houston [14th Dist.] 2018, no

pet.) (citing Nat’l Plan Adm’rs, Inc. v. Nat’l Health Ins. Co.,

235 S.W.3d 695, 704 (Tex. 2007).

Drafting for Multiple Executors, Trustees, and Agents Chapter 13

Once an agent has accepted their appointment as agent,

the agent becomes a fiduciary as to the principal only

when acting as an agent under the power of attorney.

199

According to the Professor Johanson’s commentary to

Texas Estates Code Section 751.101, the 2017

Amendment resolved concerns raised by the decision

in Vogt v. Warnock,

200

which held that a person who

knew she had been named as an agent under a durable

power of attorney stood in a fiduciary relationship with

the principal despite never having acted under the

power of attorney.

201

There is little Texas case law

interpreting Section 751.101 and the statute poses

several questions. For example, does the word “when”

imply that fiduciary duties are imposed on an act-by-

act basis? Note the subtle difference in effect if Texas

Estates Code Section 751.101 had included “once” or

“after” instead of “when.” The former would trigger

and impose a fiduciary relationship on all subsequent

dealings, whereas the later seems to suggest that

fiduciary duties are imposed on an act-by-act basis.

But would this be contrary to the implied terms of a

durable power of attorney once the principal becomes

incompetent? Can an agent accept appointment and

then cease acting or is there an implied duty once an

agent has undertaken to act for an incompetent

principal to continue to do so? Moreover, because

Texas law recognizes a confidential and informal

fiduciary relationships, it still appears fiduciary duties

could be imposed on an agent notwithstanding the

agent’s claim his or her acts were “not taken as an

agent for the principal.” In summary, it is unclear how

far Section 751.101 alters common law principles

applicable to all agents.

2. Duty to Participate

Each co-agent owes duties to the common

principal.

202

The precise commencement, scope and

duration of each co-agent’s duties, however, may be

difficult to determine. An agent may only delegate

authority under the durable power of attorney if the

principal granted the agent this authority.

203

Unless

otherwise agreed, an agent is as responsible to the

principal for the conduct of a subagent in connection

with the principal's affairs entrusted to the subagent as

the agent is for his own conduct.

204

199

TEX. EST. CODE § 751.101.

200

Vogt v. Warnock, 107 S.W.3d 778 (Tex. App.–El Paso

2003, writ denied).

201

Johanson’s, TEXAS ESTATES CODE, Commentary to

§751.101 (West 2022).

202

RESTATEMENT (THIRD) OF AGENCY § 1.04 (2006).

203

TEX. EST. CODE § 751.031.

204

Highway Ins. Underwriters v. Lufkin-Beaumont Motor

Coaches, 215 S.W.2d 904, 932 (Tex. Civ. App.—Beaumont

1948, writ ref’d n.r.e.); see also R

ESTATEMENT (THIRD) OF

AGENCY § 3.15, cmt. d (2007).

Where a principal appoints co-agents under the

Statutory DPOA, is the co-agent who essentially stays

on the side-lines during the principal’s incapacity liable

for the acts/omissions of the other “lead” co-agent?

For example, what if the passive agent assists the

principal for one transaction and then does not

continue to otherwise act for the principal, choosing

instead to allow the lead co-agent to manage the

principal’s property? Assume further, the passive

agent never puts himself or herself on the principal’s

bank accounts, content to only help as needed. Later,

the passive agent learns the lead agent engaged in self-

dealing and misappropriated the principal’s assets. Is

the passive agent liable for breaching a fiduciary duty

for failing to act – i.e. failing to participate?

Arguments can be made that an agent, who has

accepted their appointment, has no duty to

participate in the management of the principal’s

property or stay informed as to the actions of the

other agent. The Texas Estates Code does not impose

an express duty of care on an agent or other express

duty to supervise and monitor the acts/omissions of a

co-agent – it only imposes a statutory duty to “take any

action reasonably appropriate under the circumstances

to safeguard the principal’s best interest” on an agent

who has “actual knowledge of a breach or imminent

breach of fiduciary duty by another agent.”

205

Moreover, there are more sections, by number, in the

Durable Power of Attorney Act which identify and

explain “powers” than “duties.” Additionally, the

Texas Estates Code seems to impose fiduciary duties

on only those agents who have both “accepted” his or

her appointment and “only when acting as an agent

under the power of attorney.”

206

For example: an agent

“has a duty to inform and to account for actions taken

under the power of attorney;

207

an agent “shall timely

inform the principal of each action taken under a

durable power of attorney;”

208

and an agent “shall

maintain records of each action taken or decision

made by the agent.”

209

The Texas Estates Code seems

to provide a remedy for an agent who refuses to act –

his or her agency is terminated. An agent who refuses

to act potentially renders him or her “no longer

qualified” to serve as agent, which arguably terminates

his or her authority and vests a named remaining or

successor agent with authority to act.

210

What level of

205

TEX. EST. CODE § 751.121.

206

TEX. EST. CODE §§ 751.022 and 751.101.

207

TEX. EST. CODE § 751.101.

208

TEX. EST. CODE § 751.102.

209

TEX. EST. CODE § 751.103.

210

TEX. EST. CODE § 751.132 (An agent’s authority under a

durable power of attorney terminates when the agent is no

longer qualified).

Drafting for Multiple Executors, Trustees, and Agents Chapter 13

“refusing to act” is necessary to trigger such a

termination of agency authority is unclear.

On the other hand, arguments can be made

that an agent, who has accepted their appointment,

has a duty to participate in the management of the

principal’s property and stay informed as to the

actions of the other agent (and/or not otherwise stick

their head in the sand in willful ignorance of his or her

co-agent’s actions/omissions). Texas case law

establishes that “a power of attorney creates an agency

relationship;”

211

Common law authorities, such as the

ESTATEMENT (THIRD) ON AGENCY, states an agent

owes a duty of care: “Subject to any agreement with

the principal, an agent has a duty to the principal to act

with the care, competence, and diligence normally

exercised by agents in similar circumstances;”

212

“if

the agent receives property for the principal, the agent's

duty is to use due care to safeguard it pending delivery

to the principal;”

213

“providing a service gratuitously

may subject an agent to duties of competence and

diligence that are no different than those owed to a

principal who agrees to compensate the agent.”

214

Additionally, Texas case law also establishes that

“a negligent breach by an agent of an agency

relationship constitutes an independent tort for which

an action for damages will lie.”

215

Additionally, the

Texas Supreme Court long ago stated:

He who undertakes to perform a service for

another is the agent or servant of the person

for whom the service is to be performed, and

in accepting such employment he assumes

that he possesses the requisite capacity and

skill to efficiently perform such service, and

that he will give to its performance the

necessary diligence and care. If he is not in

fact possessed of such capacity and skill as

he assumes by his engagement that he has, or

211

In re Estate of Miller, 446 S.W.3d 445, 454 (Tex. App.—

Tyler 2014, no pet.).

212

RESTATEMENT (THIRD) OF AGENCY § 8.08 (2006).

213

RESTATEMENT (THIRD) OF AGENCY § 8.12, cmt. b (2006).

214

RESTATEMENT (THIRD) OF AGENCY § 8.12, cmt. e (2006).

215

Ranger Cnty. Mut. Ins. Co. v. Guin, 723 S.W.2d 656, 660

(Tex. 1987)(automobile insurer was negligent in failing to

settle lawsuit against insured within policy limits); see also

Williams v. O’Daniels, 35 Tex. 542, 544 (1872)(defendant

agreed to carry merchandise to a suitable market and to sell

it, and having brought it to a market it was seized by the

shipper’s creditors; jury properly instructed “that if, in the

exercise of a sound discretion, defendant used such diligence

and care as a prudent man would have used with his own

cotton, then he would not be liable for its subsequent loss”);

3 T

EX. JUR. 3D AGENCY § 162, Liability of agent to principal

for negligence.

should fail to exercise that degree of care

necessary to the service he has engaged to

render, and damage results to the principal or

master in consequence of his ignorance or

negligence, he is liable therefor at the suit of

the master.

216

The Statutory Power of Attorney Form itself includes

an “Important Information for Agent” which states,

“This is a special legal relationship that imposes on

you legal duties that continue until you resign or the

power of attorney is terminated, suspended, or revoked

by the principal or by operation of law.”

217

That

section of the form also states, “a fiduciary duty

generally includes the duty to act in good faith.” To the

extent the “Important Information for Agent” forms

part of the “agreement between the principal and

agent,” it should be taken into account when

determining the nature and scope of the agent’s

duties.

218

“An agent has a duty to act in accordance

with the express and implied terms of any contract

between the agent and the principal.”

219

Are the terms

found in the “Important Information for Agent” in

conflict with Texas Estates Code § 751.101? Are these

contractual terms, which form the basis of independent

liability?

220

Finally, the duty of one agent to supervise and

monitor another can be especially unclear where

“accidental co-agents” exist, for example, when the

principal signs a power of attorney that that does not

revoke a previous power of attorney. Texas Estates

Code § 751.135 states, “The execution of a durable

power of attorney does not revoke a durable power of

attorney previously executed by the principal unless

the subsequent power of attorney provides that the

previous power of attorney is revoked or that all other

durable powers of attorney are revoked.”

D. Decision Making by Co-Agents

At common law, if a principal appointed two or

more individuals, the presumption was one of joint

agency:

216

Murrah v. Brichta, 9 S.W. 185, 187 (Tex. 1888)(loan

agent who having engaged to place the loan for husband and

wife on good security had a duty to do so; and, having failed

in the performance of this duty, was liable regardless of

whether such failure was attributable to his ignorance or his

negligence).

217

TEX. EST. CODE § 752.051.

218

Nat’l Plan Adm’rs, Inc. v. Nat’l Health Ins. Co., 235

S.W.3d 695, 702 (Tex. 2007).

219

RESTATEMENT (THIRD) OF AGENCY § 8.07 (2006).

220

See Sassen v. Tanglegrove Townhouse Condo. Ass’n, 877

S.W.2d 489, 493 (Tex. App.—Texarkana 1994, writ

denied)(An agent’s breach of its fiduciary duty, especially

when the duty arises out of a written contract of agency, is a

breach of contract as well as a tort).

Drafting for Multiple Executors, Trustees, and Agents Chapter 13

If a principal invests two or more individuals

with authority to represent it in a particular

transaction, it is ordinarily presumed that

such authority was thus conferred because of

special and personal considerations, so that

the principal might obtain the benefit of the

combined experience, discretion, and ability

of such persons. Accordingly, unless it

appears that the principal's intention was

otherwise, as a general rule the powers

invested by the principal in such agents must

be jointly exercised by all of them, and may

not be exercised by less than all of them.

221

Texas Estates Code § 751.021 explicitly provides for

co-agents acting independently:

A principal may designate in a durable power

of attorney two or more persons to act as co-

agents. Unless the durable power of attorney

otherwise provides, each co-agent may

exercise authority independently of the other

co-agent.

E. Co-Agent Liability for Acts of Other Agent

Texas Estates Code § 751.121 deals with liability

for joint agents and provides:

(a) An agent who has actual knowledge of a

breach or imminent breach of fiduciary

duty by another agent shall notify the

principal and, if the principal is

incapacitated, take any action

reasonably appropriate under the

circumstances to safeguard the

principal’s best interest. An agent who

fails to notify the principal or take action

as required by this subsection is liable

for the reasonably foreseeable damages

that could have been avoided if the

agent had notified the principal or taken

the action.

(b) Except as otherwise provided by

Subsection (a) or the durable power of

attorney, an agent who does not

participate in or conceal a breach of

fiduciary duty committed by another

221

3 TEX. JUR. 3D AGENCY § 95; see also Musquiz v.

Marroquin, 124 S.W.3d 906, 912 (Tex. App.—Corpus

Christi–Edinburg 2004, pet. denied)(unambiguous language

in power of attorney provided for the appointment of two

attorneys-in-fact, conjunctively and equally); 3 A

M. JUR. 2D

AGENCY § 162; 2A C.J.S. AGENCY § 248.

agent, including a predecessor agent, is

not liable for the actions of the other

agent.

Although Texas Estates Code Section 751.121

expressly states a co-agent faces liability when he or

she has actual knowledge of “a breach or imminent

breach of fiduciary duty by another agent,” it does not

address whether a co-agent has a duty to investigate or

otherwise gain actual knowledge of the other co-

agent’s acts or omissions. For example, should all co-

agents be listed on the principal’s financial accounts

for monitoring purposes?

F. Co-Agent Succession

Tex. Estates Code § 751.023 deals with agent

succession and states:

(a) A principal may designate in a durable

power of attorney one or more successor

agents to act if an agent resigns, dies, or

becomes incapacitated, is not qualified

to serve, or declines to serve.

(b) A principal may grant authority to

designate one or more successor agents

to an agent or other person designated

by name, office, or function.

otherwise provides, a successor agent:

(1) has the same authority as the

authority granted to the predecessor

agent; and

(2) is not considered an agent under

this subtitle and may not act until

all predecessor agents, including

co-agents, to the successor agent

have resigned, died, or become

incapacitated, are not qualified to

serve, or have declined to serve.

V. OTHER LEGAL THEORIES REGARDING

LIABILITY FOR CO-FIDUCIARY’S ACTS

& OMISSIONS

Any co-fiduciary must be aware of additional

legal theories which may impose liability on them in

addition to, or in spite of, the terms of the governing

instrument and/or the applicable default rules.

A. Knowing Participation in Breach of Fiduciary

Duty

“It is settled law of this State that were a third

party knowingly participates in the breach of a

fiduciary duty, such third party becomes a joint tort-

Drafting for Multiple Executors, Trustees, and Agents Chapter 13

feasor with the fiduciary and is liable as such.”

222

The

elements of a knowing participation claims are: (1) the

existence of a fiduciary duty owed by a third party to

the plaintiff; (2) the defendant knew of the fiduciary

relationship; and (3) the defendant was aware of his

participation in the third party’s breach of its duty.

223

B. Civil Conspiracy

An action for civil conspiracy has five elements:

(1) a combination of two or more persons; (2) the

persons seek to accomplish an object or course of

action; (3) the persons reach a meeting of the minds on

the object or course of action; (4) one or more

unlawful, overt acts are taken in pursuance of the

object or course of action; and (5) damages occur as a

proximate result.

224

Conspiracy may be proved by

inferences from circumstantial evidence.

225

222

Kinzbach Tool Co. v. Corbett-Wallace Corp., 138 Tex.

565, 160 (Tex. 1942) (holding third-party competitor liable

for knowing participating in breach of fiduciary duty when it

paid employee commission to obtain technology owned by

employer at a favorable price.); Kastner v. Jenkins &

Gilchrest, P.C., 231 S.W.3d 571, 580 (Tex. App.—Dallas

2007, no pet.).

223

Straehla v. AL Glob. Services, LLC, 2020 WL 7364661,

at *5 (Tex. App.—San Antonio Dec. 16, 2020, no pet. h.)

(affirming trial court’s denial of TCPA motion to dismiss;

subcontractor established a prima facie case for knowing

participation in breach of fiduciary duty); Darocy v.

Abildtrup, 345 S.W.3d 129, 138 (Tex. App.—Dallas 2011,

no pet.) (holding the evidence was legally and factually

sufficient to support trial court’s finding that party aided and

participated in fiduciary’s breaches of fiduciary duty).

224

First United Pentecostal Church of Beaumont v. Parker,

514 S.W.3d 214 (Tex. 2017); Insurance Co. of North

America v. Morris, 981 S.W.2d 667 (Tex. 1998); Operation

Rescue-National v. Planned Parenthood of Houston and

Southeast Texas, Inc., 975 S.W.2d 546 (Tex. 1998); Massey

v. Armco Steel Co., 652 S.W.2d 932 (Tex. 1983); Walker v.

Hartman, 516 S.W.3d 71 (Tex. App.—Beaumont 2017),

review denied, (Aug. 31, 2018).

225

Chu v. Hong, 249 S.W.3d 441, 447 (Tex. 2008); Int’l

Bankers Life Ins. Co. v. Holloway, 368 S.W.2d 567, 581

(Tex. 1963)(“The general rule is that conspiracy liability is

sufficiently established by proof showing concert of action

or other facts and circumstances from which the natural

inference arises that the unlawful, overt acts were committed

in furtherance of common design, intention, or purpose of

the alleged conspirators”); Jernigan v. Wainer, 12 Tex. 189,

193 (1854)(“When men enter into conspiracies, they are not

likely to call in a witness. They resolve their schemes

clandestinely and in secret. Their purpose is imposition and

deception; and secrecy is necessary to its accomplishment.

In such cases the injured party must necessarily have

recourse to circumstantial evidence. For it is only by the

inferences and deductions which men properly and naturally

draw from the acts of others in such cases, that their

intentions can be ascertained.”).

VI. BEST DRAFTING PRACTICES

If anyone has read this far and still seeks to

prepare estate planning documents naming co-

fiduciaries, then they should stop, return to the

beginning, and re-read the paper. If a client cannot be

dissuaded from naming co-fiduciaries, whether co-

trustees, co-executors/administrators, or co-agents, the

estate planner must be prepared customize the estate

plan appropriately. Certain co-fiduciary issues, if left

unaddressed by the drafter, are prone to potential

confusion and conflict. Chief among these issues are:

(1) appointment, resignation, removal and replacement;

(2) decision making; and (3) compensation.

A. Appointment, Resignation, Removal, and

Replacement

1. Trustees

With respect to appointing co-trustees, the estate

planner should consider a provision requiring the

original intended number to be maintained at all times

– particularly where a majority decision making

process is used. For example, if a trust names three co-

trustees, and one declines to serve, resigns or dies, the

trust should make it clear whether the vacancy must be

filled to avoid a potential deadlock between the

remaining two co-trustees.

A trustee – like anyone else who has a job — may

realize and decide at some point that “it’s time to say

goodbye.” After all, a trustee may resign even though

no one has requested the trustee’s resignation or

removal.

226

Alternatively, one or more beneficiaries of

the trust may want to remove the trustee. A trust

should contain specific provisions on the appointment,

resignation, removal, and replacement of co-trustees.

227

A trustee cannot simply quit in the absence of an

adequate provision in the trust instrument. Ideally, a

trust should include some non-judicial methods for

each of these various actions so that the co-trustees or

beneficiaries do not have to go to court to approve a

resignation or an appointment.

228

For example, Texas

Trust Code Section 113.083 allows for a successor

trustee to be selected according to the method, if any,

prescribed in the trust instrument. Such method could

include the use of a trust protector with the power to

appoint trustees.

229

Otherwise, the Texas Trust Code also allows a

trustee to petition a court for permission to resign as

226

See Am. Sav. & Loan Ass’n of Houston v. Musick, 531

S.W.2d 581, 587 (Tex. 1975).

227

David F. Johnson, The More the Merrier? Issues Arising

from Co-Trustees Administering Trusts, 45

Annual

Advanced Estate Planning & Probate (2021), 53.

228

Id.

229

TEX. TRUST CODE § 114.0031.

Drafting for Multiple Executors, Trustees, and Agents Chapter 13

trustee.

230

Absent a provision in the trust instrument,

the trustee cannot resign or be discharged except with

court permission or with the general consent of all

persons interested in the execution of the trust.

231

Moreover, merely abandoning the trust or resigning

does not vest the trust property in a successor nor

relieve a trustee from liability.

232

Thus, a trustee who

wants out should consider filing a petition to resign

with a court of competent jurisdiction. The court may

accept a trustee’s resignation and discharge the trustee

from the trust on the terms and conditions necessary to

protect the rights of other interested persons.

233

2. Executors/Administrators

Similarly, if co-executors/administrators are

named, the will should specify what happens if one of

the co-executors/executors declines to serve, resigns,

or fails to serve for any other reason. Under the

Default Rule, Texas Estates Code § 307.002(a), if there

is more than one executor and one executor “dies,

resigns, or is removed…the estate shall proceed with

the administration as if the death, resignation, or

removal had not occurred.” As one commentator

keenly observes:

the statute does not specify what should

happen if a named co-executor declines to

serve before appointment. Should a named

co-executor serve alone or should the next

named individual serve? Is the testator’s

desire for coexecutors person dependent

(e.g., the Testator believes his wife should

always serve with a co-executor, but if the

wife declines to serve, his son may serve as

sole executor) or does the testator want co-

executors no matter what? The will should

provide clear instructions to carry out the

testator’s intent.

234

The estate planner should also consider whether to

utilize Texas Estates Code Section 254.006 to grant an

executor named in the Will, or to another person, the

authority to designate one or more persons to serve as

administrator.

235

230

TEX. TRUST CODE § 113.081.

231

McCormick v. Hines, 498 S.W.2d 58, 62–63 (Tex. Civ.

App.—Amarillo 1973, writ dism’d) (finding agreement

between some of the beneficiaries and the cotrustees which

required cotrustees to resign and to petition the court to

appoint new trustees was enforceable).

232

Republic Nat. Bank & Tr. Co. v. Bruce, 130 Tex. 136,

140, 105 S.W.2d 882, 884 (Comm’n App. 1937).

233

Id.

234

Christine Wakeman, Performing a Post-Mortem Autopsy:

How to Dissect a Will Someone Else Drafted, Intermediate

Este Planning and Probate (2016), 9.

235

TEX. EST. CODE § 254.006(a).

3. Agents

The Estate planner should consider including a

statement that the principal revokes all prior powers of

attorney to avoid the possibility of inadvertently having

multiple agents. Additionally, the Texas Estates Code

states that “unless the durable power of attorney

otherwise provides, a successor agent is not considered

an agent . . . and may not act until all predecessor

agents, including co-agents, to the successor agent

have resigned, died, or become incapacitated, are not

qualified to serve, or have declined to serve.”

236

Therefore, the drafter should consider whether it is

desirable to override the statutory succession order by,

for example, allowing a successor agent to fill a co-

agent’s vacancy and serve alongside the other acting

co-agent. Additionally, it may be desirable to grant

someone the authority to fill vacancies. Texas Estates

Code Section 751.023 expressly states that a principal

may grant authority to designate one or more successor

agents to an agent or other person designated by name,

office, or function.

B. Decision-Making

1. Co-Trustees

The settlor should provide for how the co-trustees

will vote: unanimous, majority, etc. The settlor should

provide for any special delegations of duties, such as

one co-trustee having primary responsibility for

investments and accounting and another for

distributions. Alternatively, the document may provide

a broad delegation clause such as:

The co-Trustees at any time in office may at

any time and from time to time agree among

themselves, by an instrument in writing

signed by them, that any one or more or all

of their powers, duties and authorities

hereunder, discretionary or otherwise, may

be exercised by any of them or by a certain

one of them. Any such instrument of

delegation shall be effective for the period

specified therein or until earlier revoked by a

further instrument in writing signed and

delivered by any co-Trustee to the others.

Any person dealing with the co-Trustees

shall be entitled to rely upon any such

instrument of delegation until such person

has actual notice of the termination

thereof.

237

The settlor should consider including provisions

to break deadlocks among co-trustees. One

236

TEX. EST. CODE § 751.023.

237

George L. Cushing et al., The Practical Response:

Representing the Fiduciary, SE87 ALI-ABA 157 (2000), 4.

Drafting for Multiple Executors, Trustees, and Agents Chapter 13

commentor suggests the following solutions: “(1) a

dominant co-trustee that has the final say regardless of

disagreement; (2) decision by majority vote among the

co-trustees (this does not work if there are only two

trustees); (3) resorting a majority vote of the

beneficiaries of the trust; or (4) resorting to a trust

protector to break deadlocks.”

238

Additionally, an

individual or entity may be appointed solely to serve as

an “independent tie breaker,” making clear that the role

and responsibilities of the tie-breaker extend only to

acting in good faith to the resolution of the dispute.

239

2. Co-Executors/Administrators

Under Texas Estates Code § 307.002, co-

executors/administrators may act independently unless

they are conveying real property. If more than two co-

executors/administrators will be used, the drafter

should consider whether to use a majority decision

making structure, or a majority deadlock scheme.

3. Co-Agents

Unless the durable power of attorney otherwise

provides, each co-agent may exercise authority

independently of the other co-agent.

240

Thus, the estate

planner should consider whether and to what extent it

may be advisable to expressly provide that co-agents

must act jointly. For example, should the principal

borrow the default scheme found in the Texas Estates

Code and require the co-agents to act jointly in the

conveyance of real property? If more than two co-

agents will be used, the drafter should consider

whether to use a majority decision making structure, or

a majority deadlock scheme. Additionally, the estate

planner should consider whether to grant the agent the

power to delegate authority granted under the power of

attorney in accordance with Texas Estate Code Section

751.031(b)(5).

C. Compensation

Compensating co-fiduciaries presents a variety of

problems: Are they each entitled to what a single

fiduciary would make?

241

Are they entitled to

compensation based on the duties that they primarily

are responsible for?

242

Are they entitled to

compensation based on the tasks they each actually

238

David F. Johnson, The More the Merrier? Issues Arising

from Co-Trustees Administering Trusts, 45

Annual

Advanced Estate Planning & Probate (2021), 54.

239

George L. Cushing et al., The Practical Response:

Representing the Fiduciary, SE87 ALI-ABA 157 (2000), 4.

240

TEX. EST. CODE § 751.021.

241

David F. Johnson, The More the Merrier? Issues Arising

from Co-Trustees Administering Trusts, 45

Annual

Advanced Estate Planning & Probate (2021), 54.

242

Id.

perform? The trust, will, or power of attorney should

include specific compensation terms.

D. Arbitration

To potentially resolve disputes without protracted

litigation by and among co-fiduciaries, settlors and/or

testators may also wish to include an arbitration or

mediation provision.

243

VII. ALTERNATIVES TO CO-FIDUCIARIES

If the client wants to name co-fiduciaries to add

convenience and share burdens or to allow for the

appointment of individuals with different skills and

expertise, consider instead that the fiduciary may

employ agents to assist them in fulfilling their duties

and that the instrument and/or governing law may

grant the fiduciary the power to delegate difficult

functions to professional third parties.

If the client wants to name co-fiduciaries to avoid

favoritism or offending a child, consider instead

naming a third-party as the fiduciary or utilizing a trust

committee to allow children to feel involved.

If the client wants to name co-fiduciaries to

provide checks and balances, consider instead:

• Educating the beneficiaries. For example, the

settlor could include disclosures in the trust

agreement or otherwise setting forth the fiduciary

duties owed by the trustee to the beneficiaries and

explaining to the beneficiaries what their rights

are so that they are in a better position to hold the

trustee accountable.

• Consider a Trust Protector or Trust Advisor.

The trust instrument may provide a person or

committee with oversight and authority to remove

and appoint trustees, advisors, trust committee

members, and other protectors.

244

• Providing the beneficiaries with removal

powers. In lieu of utilizing a trust committee or

trust protector, the trust instrument may provide a

class of beneficiaries with authority to unilaterally

remove and replace trustees.

• Requiring disclosure. Some trusts require

mandatory accountings. In lieu of a formal

accounting, consider requiring the dissemination

of reports or financial statements at regular

intervals to the beneficiaries and/or provide for

periodic meetings of the fiduciary and

beneficiaries. These authors know of no reason

why a durable power of attorney could not include

243

See Cameron McCulloch, Jr. & Michelle Rosenblatt,

Drafting & Enforcing Arbitration Clauses in Wills, Trusts,

& Settlement Agreements, 43

Annual Advanced Estate

Planning & Probate (2019); see also Rachal v. Reitz, 403

S.W.3d 840 (2013).

244

TEX. TRUST CODE §114.0031.

Drafting for Multiple Executors, Trustees, and Agents Chapter 13

similar terms to promote disclosure and reduce the

potential for uncertainty and suspicion.