1. (a) A beneficiary is liable for loss to the trust if the beneficiary has:

   1. (1) misappropriated or otherwise wrongfully dealt with the trust property;
   2. (2) expressly consented to, participated in, or agreed with the trustee to be liable for a breach of trust committed by the trustee;
   3. (3) failed to repay an advance or loan of trust funds;
   4. (4) failed to repay a distribution or disbursement from the trust in excess of that to which the beneficiary is entitled; or
   5. (5) breached a contract to pay money or deliver property to the trustee to be held by the trustee as part of the trust.
2. (b) Unless the terms of the trust provide otherwise, the trustee is authorized to offset a liability of the beneficiary to the trust estate against the beneficiary's interest in the trust estate, regardless of a spendthrift provision in the trust.

Added by Acts 1983, 68th Leg., p. 3332, ch. 567, art. 2, Sec. 2, eff. Jan. 1, 1984.