Breach of Fiduciary Duty in Harris County Probate

An executor, administrator, or trustee who holds other people’s property is a fiduciary, and Texas law judges a fiduciary’s conduct by a standard well above ordinary carelessness. This page covers the cases where estate money went somewhere it shouldn’t have.

Who Owes the Duty

Executors and administrators owe fiduciary duties to the estate’s beneficiaries and creditors, and trustees owe them to the trust beneficiaries. The duty comes with the office, whether or not the will mentions it.

The core obligations are loyalty, care, and disclosure. Loyalty means the fiduciary doesn’t put personal interests ahead of the beneficiaries’. Care governs how the property is managed. Disclosure means keeping beneficiaries informed about what’s happening with their inheritance so they aren’t left guessing.

Disclosure matters more than most people realize. Texas courts hold that executors and trustees owe beneficiaries full disclosure of the material facts that might affect their rights, and that duty stands apart from the formal accounting right, so it applies well before the 15-month accounting window opens.

Common Fact Patterns

These are the patterns we see most often.

• Self-dealing. The executor sells estate real estate to themselves, a spouse, an entity they control, or a friend, usually at a price that was never tested on the open market.
• Commingling. Estate funds go into a personal account. Sorting out what belonged to whom gets expensive after that, and the fiduciary is the one who has to account for it.
• Using estate property. The executor lives in the house rent-free, drives the estate’s vehicles, or runs a business out of estate premises while the other beneficiaries wait.
• Paying themselves. The executor takes compensation without approval, or pays their own company fees for services to the estate.
• Letting assets waste. Insurance lapses, taxes go unpaid, a rental sits empty, mineral interests go unleased, or a business loses value because nobody is running it.
• Silence. No accounting, no answers, and no information, sometimes for years.

The Accounting Demand

Under Texas Estates Code Section 404.001, once 15 months have passed since the clerk first issued letters, any interested person may demand an accounting from an independent executor. The executor must produce a sworn exhibit detailing the property received, what was done with it, the debts paid, the debts still owing, the property still held, and why the administration shouldn’t be closed.

If the executor doesn’t comply within 60 days after receiving the demand, the probate court can be asked to compel it. Further accountings can be demanded at intervals of at least 12 months.

Most breach cases are built from what the accounting shows. When no accounting is ever produced, that failure is a removal ground under Section 404.0035 and usually becomes part of the breach case as well.

Remedies

Depending on the facts, the court can order the fiduciary to return the property or pay its value, disgorge profits made from the breach, or forfeit fiduciary compensation. It can also impose a constructive trust on property that was improperly transferred, remove the fiduciary, and allow recovery against the bond if there is one.

Removal and damages are separate claims, and they’re normally brought together. Removal stops the executor from doing further harm, and the damages claim is how the estate recovers what’s already gone.

Which Court Hears It

Texas Government Code Section 25.1031(c) establishes five statutory probate courts in Harris County, with Judges Simoneaux, Medina, Cox, Horwitz, and Watson presiding over Courts 1 through 5, respectively. Courts 1 through 4 sit at the Harris County Civil Courthouse, 201 Caroline Street, and Court 5 is at 1115 Congress Street, 5th Floor.

In a county with a statutory probate court, Estates Code Section 32.005 requires a cause of action related to a pending estate to be brought in the probate court unless another statute makes jurisdiction concurrent. Section 32.007 gives the probate courts concurrent jurisdiction with the district courts over suits by or against trustees and actions involving trusts. In practice, that means a removal action, a damages claim against the executor, and a dispute over trust property can all be heard in the same Harris County probate court.

Where a claim is filed inside that court depends on what it is. Under the local rules, matters principally concerned with administering the estate are core matters and stay under the main cause number. Contested matters that bear no direct relationship to the administration and could become an independently tried lawsuit are ancillary, and they get the original docket number plus a suffix beginning with 4. An estate numbered 123,456 would carry an ancillary matter as 123,456-401, and getting the number wrong at the start costs time later.

Limitations

Breach of fiduciary duty claims are subject to limitations. The period depends on the specific claim pleaded and on when the breach was discovered or should have been. Concealment by a fiduciary affects that analysis, which is one reason these cases often turn on when the beneficiary actually learned what happened.

Don’t treat any of that as a reason to wait. Evidence disappears, property gets sold to third parties, and money gets spent, so the practical deadline usually comes well before the legal one.

Mediation and Trial

Plan on mediating. Local Rule 11.1 of the Harris County probate courts provides that, except for good cause shown, only cases that have gone through a previously ordered ADR procedure will be tried.

If the case doesn’t settle, you’re entitled to a jury. Texas Estates Code Section 55.002 gives a party in a contested probate proceeding the right to a jury trial as in other civil actions. Under Texas Rule of Civil Procedure 216, the written jury demand has to be filed and the jury fee paid a reasonable time before trial and at least 30 days in advance, which is earlier than many people expect.

Local Rule 11.6 also sets aside two periods each year. Unless all parties consent, the courts won’t assign cases to trial on the merits or hold oral hearings on motions during the week of the Texas Bar CLE Advanced Estate Planning and Probate program, or during any December week whose Monday falls between December 22 and 31.