Duty of Loyalty
• See Texas Prop 113.051
• Duty to keep accounts, minimize taxes, care and skill etc.
• Other duties,
• “Prohibition on self-dealing”
• No buying, selling, dealing with trust AT ALL EVER unless you’re asking judge to get your fee
• This includes indirect offenses as well
• Rothko
• Standing based on restriction to charity statute – now repealed, ? case would not have arisen BUT FOR statute
• Executors sold for way under value and gave 50% commission for additional painting
• Problem with COI – executor selling to his company – status seeker and liquidates own art collection
- Another executor makes K with gallery to increase his own status
- Last executor is just stupid – but liable for 6.4 million anyway!
- Texas Prop 113.051-113.056
• See also co-trustee statute – Texas Prop 114.006
• Ledbetter
• Why couldn’t make merger decision?
• Didn’t stop from barriers to hostile takeover
• Trustee retires, so try not to have ??
• Exculpatory language – see 113.059
• Settlor can remove duties from trustee
• 113.059b – no exculpation for corporate trustee for things in 113.052 and 113.053
• could call this exculpatory
- Can also have implied self-dealing
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A: Darrell Malone's Answer
Can the Executor of a Will sell estate (property) way under market value in order to get a quick sell even though all other beneficiaries disagree with this action?