Texas Trust Law: What Every Trust Holder Needs to Know

Texas does things its own way when it comes to trusts. The state has not adopted the Uniform Trust Code that most states follow, and several of its rules are the opposite of what you'll find in general online trust advice. The biggest surprise for most people? Texas trusts are irrevocable by default, and the trustee has no obligation to send you an accounting unless you specifically ask for one in writing.

If you have a trust governed by Texas law, or if you're serving as a trustee in Texas, this guide covers the rules that actually apply to you.

This guide applies to both revocable and irrevocable trusts in Texas, though certain rules around beneficiary information rights only apply to irrevocable trusts and beneficiaries over the age of 25.

Where Texas trust law lives

The Texas Trust Code is in Property Code, Title 9, Subtitle B, Chapters 111 through 117. It has been in effect since January 1, 1984. That makes it one of the older trust codes in the country, predating the Uniform Trust Code by 16 years.

The chapters cover general provisions (111), creation and validity (112), administration (113), liabilities and remedies (114), jurisdiction (115), principal and income (116), and the prudent investor rule (117). Texas has selectively borrowed ideas from the UTC over the years but never formally adopted it, so the structure and many of the rules are unique.

What Texas trustees are required to do

Texas trustee duties are spread across several chapters, but the core obligations are clear.

Act in good faith. Section 113.051 requires the trustee to administer the trust "in good faith" according to the trust document. This good-faith standard was added in 2005, modeled on the UTC. Before that, Texas had a looser standard that gave trustees more latitude.

Put beneficiaries first. Section 117.007 requires the trustee to invest and manage trust assets "solely in the interest of the beneficiaries." You can't use trust assets for personal benefit, and section 117.008 says you must treat all beneficiaries impartially.

Invest prudently. Texas adopted the Uniform Prudent Investor Act as Chapter 117, effective January 2004. You need to diversify investments (section 117.005), evaluate the portfolio as a whole rather than one investment at a time, and consider the trust's purposes, the beneficiaries' needs, and general economic conditions. This was a significant change from older Texas law, which allowed more concentrated holdings.

Don't self-deal. Sections 113.052 through 113.057 prohibit self-dealing transactions. You can't buy trust assets for yourself, sell your own assets to the trust, or borrow from the trust without specific authorization in the trust document.

TrustHelm tip: TrustHelm tracks your trustee duties based on your state's specific rules. For Texas trustees, the platform flags the 90-day accounting response deadline and monitors whether beneficiaries have submitted written accounting requests.

The demand-based accounting system

This is the biggest practical difference between Texas and most other states. Texas does not require the trustee to automatically provide an annual accounting. Instead, it uses a demand-based system.

Here's how it works. Under section 113.151, a beneficiary sends the trustee a written demand for an accounting. Once the trustee receives that demand, they have 90 days to deliver a written statement of accounts. The trustee is not obligated to provide an accounting more than once every 12 months, regardless of how many times a beneficiary asks.

If the trustee ignores the demand or fails to deliver within 90 days, the beneficiary can file a lawsuit. The court can award attorney's fees against the trustee, charged either to the trustee personally or in their capacity as trustee.

What has to be in the accounting? Section 113.152 requires: all trust property that came to the trustee's knowledge, a complete account of receipts and disbursements (with principal and income shown separately), a list of all property being administered, cash balances and where they're held, and all known liabilities.

One critical point: the trustee's duty to respond to accounting demands from beneficiaries who are entitled to distributions cannot be overridden by the trust document. Section 111.0035(b)(4) makes this a mandatory rule. Even if your trust says "the trustee never has to account to anyone," Texas law says otherwise for beneficiaries receiving or eligible to receive distributions.

Texas has no mandatory beneficiary notice requirement

Here's another area where Texas differs sharply from most states. Texas does not require the trustee to notify beneficiaries when a trust is created, when it becomes irrevocable, or when a new trustee takes over. Most UTC states require 60-day notice to qualified beneficiaries in these situations. Texas has no equivalent rule.

There is one important limit. Section 111.0035(c) says the trust document cannot eliminate the common-law duty to inform beneficiaries of an irrevocable trust who are age 25 or older and entitled to distributions. This age threshold is unique to Texas. If you're a beneficiary under 25, the trust can legally keep you in the dark about its existence. Once you turn 25 and have a distribution interest, the trustee has a duty to keep you informed, and the trust document can't override that.

In practice, this means Texas gives trust creators more control over when and how beneficiaries learn about the trust. Some families use this flexibility to delay telling younger beneficiaries about an inheritance until they're older and more financially mature.

How trustee compensation works in Texas

If the trust document sets the trustee's compensation, that amount controls. If the trust is silent, section 114.061(a) entitles the trustee to "reasonable compensation."

Texas does not have a statutory fee schedule or percentage formula. Courts determine reasonableness by looking at factors from a case called Beaty v. Bales: the responsibility involved, the care and labor required, the size of the trust, the complexity of the work, the time spent, the skill required, the results achieved, and what other trustees in the area charge for similar work.

If a trustee breaches their duties, the court can deny compensation entirely under section 114.061(b). This is the court's way of saying that a trustee who mismanages the trust doesn't get paid for the privilege.

For family trusts, compensation is often waived or kept modest. Professional trustees (banks and trust companies) in Texas typically charge 0.5% to 1.5% of trust assets annually.

Statute of limitations for trust claims

The general statute of limitations for trust claims in Texas is 4 years under the state's residual limitations statute (Civil Practice and Remedies Code section 16.004(a)(5)). The clock starts when the beneficiary knows or should have known about the breach.

There's a narrow exception called the "discovery rule" that can delay the start of the clock for injuries that are "inherently undiscoverable." But a 2023 Texas Supreme Court decision (Triex Texas Holdings) significantly narrowed when this exception applies, so don't assume you'll always get extra time.

One important note: there is no time limit on removing a trustee. Under a 2009 court decision (Ditta v. Conte), the court's power to remove a trustee under section 113.082 is not restricted by any limitations period. If a trustee is acting badly, a beneficiary can seek removal at any time, regardless of how long the misconduct has been going on.

Texas-specific rules that catch people off guard

Trusts default to irrevocable. This is the opposite of California and the UTC, which both default to revocable. Under section 112.051(a), if your Texas trust document doesn't explicitly say "this trust is revocable," it's irrevocable. This has caught many people who assumed they could change their trust later.

Homestead protection requires exact language. Texas has strong homestead protections, but a trust can accidentally eliminate them. Under Property Code section 41.0021 and Tax Code section 11.13(j), the trust must contain specific statutory language allowing the beneficiary to occupy the property "without charge." If that exact language isn't in your trust, the homestead tax exemption and creditor protections could be lost.

The decanting statute lets you restructure without court approval. Since September 2013, sections 112.071 through 112.087 allow a trustee to distribute trust principal into a new trust with different terms, without going to court. This is called "decanting" and it's a powerful tool for fixing outdated or problematic trust provisions.

Trust protectors get real protection. Texas's directed trust statute (section 114.0031, added in 2015) is one of the strongest in the country. A trustee following a trust advisor's or protector's direction is not liable for the outcome except in cases of willful misconduct. The trustee has no duty to monitor or second-guess the advisor's decisions.

Exculpation clauses have limits. Section 114.007 says a trust provision that tries to release the trustee from liability for bad faith, intentional misconduct, or reckless indifference is unenforceable. You can include an exculpation clause for ordinary negligence, but not for deliberate wrongdoing.

TrustHelm tip: TrustHelm flags whether your trust document includes Texas-required homestead language. If you've placed your home in a trust, the platform checks that your homestead exemption is protected and reminds you to verify the language after any trust amendment.

The most common Texas trust mistakes

Assuming the trust is revocable. Because Texas defaults to irrevocable, a trust document that doesn't explicitly state it's revocable could be locked in permanently. If you created your trust intending to change it later but the word "revocable" doesn't appear, you may have a problem.

Never requesting an accounting. Because Texas uses a demand-based system, some beneficiaries go years without ever seeing how the trust is being managed. You have the right to a written accounting. Use it. Send your written demand at least once a year.

Losing homestead protection. Transferring your home into a trust without the proper statutory language can cost you your homestead exemption, which in Texas can mean losing both your property tax exemption and your creditor protection on the home.

Not accounting within 90 days of a demand. If a beneficiary sends a written demand and you miss the 90-day deadline, you're exposed to a lawsuit and potential attorney's fees charged against you personally. The clock starts when you receive the demand.

Transferring retirement accounts into the trust. This is a common mistake nationwide, but Texas trustees make it frequently. Transferring an IRA or 401(k) into the trust (rather than naming the trust as beneficiary) triggers an immediate taxable distribution. The correct approach is to name the trust as the beneficiary on the account, not retitle the account into the trust's name.

Ignoring the age-25 information threshold. Trustees sometimes assume they never need to communicate with beneficiaries because the trust says so. But for irrevocable trusts, once a beneficiary turns 25 and has a distribution interest, the duty to inform them kicks in regardless of what the trust document says.

How Texas compares to other states

Texas is one of about 14 states that have not adopted the Uniform Trust Code. If you're reading general trust advice online, a lot of it won't apply to you. Here are the key differences:

No automatic accounting. Most states require annual accountings. Texas only requires them when a beneficiary asks in writing. This gives trustees more flexibility but also means beneficiaries need to be proactive.

No mandatory beneficiary notice. Most UTC states require the trustee to notify beneficiaries within 60 days of certain events. Texas has no such requirement, and the trust document can further limit information rights for beneficiaries under 25.

Trusts default to irrevocable. In most states, a trust is assumed to be revocable unless the document says otherwise. Texas is the opposite. This is one of the most commonly misunderstood aspects of Texas trust law.

Strong trust protector provisions. Texas's directed trust statute offers some of the best protection in the country for trustees who follow an advisor's directions. If your trust uses a trust protector or investment advisor, Texas law shields the trustee from liability for following their instructions.

No state income tax. Texas has no state income tax, which makes it an attractive jurisdiction for trusts with significant income. This is one reason some families consider moving trust situs to Texas.

When to talk to an attorney

Texas trust law has enough unique features that professional guidance is important in several situations. You should consult a Texas trust attorney if: you need to determine whether your trust is revocable or irrevocable, you're placing your homestead into a trust and need the right language, you're considering decanting a trust into a new structure, a beneficiary has demanded an accounting and you're not sure what to include, or you're moving a trust to or from Texas.

For finding a qualified estate planning attorney in your area, visit TrustHelm's Find an Attorney directory.

This guide is for educational purposes only and does not constitute legal advice. Consult a qualified attorney for decisions about your trust.