Reed: Can testator relieve executor from liability?

Sandra W. Reed
Special to the Reporter

Tracy is named independent executor in his father’s will. The will contains an exculpatory clause that Tracy is not liable for any actions he takes acting as executor unless he commits intentional fraud.

Does this provision prevent Tracy from liability if he breaches any of the duties of an executor?

Sandra Reed

Do Texas statutes allow duties to be modified in a will?

The statutes governing executors are found primarily in the Texas Estates Code (“TEC”). Only a few specific sections allow modification of the Executor’s duties. Otherwise, the statute or the common law applies. (TEC § 351.001.) In some instances, the statutes state that no exception can be applied. In a few statutes "good faith" has been expressly written into the law. Nothing in the statutes allows modification of an Executor’s duties in a will.

Where is common law found?

Common law is found in court decisions of the Texas Courts of Appeal and the Texas Supreme Court.

What are common law duties of an executor?

The executor has these duties under the common law: (1) duty of good faith and loyalty, meaning an unwavering duty of good faith, fair dealing, loyalty, and fidelity to the beneficiaries; (2) duty of competency, meaning exercise of the judgment and care that persons of ordinary prudence, discretion, and intelligence exercise in the management of their own affairs; (3) duty of disclosure, meaning to make full disclosure of all known material facts which might affect a beneficiary’s interests; (4) duty not to abdicate responsibility, meaning one can’t fail to act and avoid liability; and (5) duty of construction, meaning to seek the court’s ruling on what the language means and what action is required when language of the will is unclear,.  

Exculpatory clause in will does not save executor from liability

The issue of whether a testator may exculpate an executor from liability for breach of statutory and common law fiduciary duties has never been squarely addressed in any reported Texas appellate decision to date. Broad exculpation of an independent executor by a testator for breach of statutory and common law fiduciary duties is not provided for by any statute in this state, nor does doing so comport with common law principles.

Based on all the above, the provision in his father’s will does not keep Tracy from being liable to the beneficiaries if he breaches one of his duties as Executor.

Sandra W. Reed practices Elder Law in Somervell County, which includes handling probating of estates, drafting of wills, trusts, powers of attorney and deeds as well as estate and Medicaid planning.  She lives on beautiful Chalk Mountain and can be reached at 254.797.0211; 817.946.2809 or at sreed1247@gmail.com.