Trusted | Experienced | Knowledgeable

Is your trustee breaching the fiduciary duty?

On Behalf of | Jun 24, 2022 | Estate Planning & Probate |

Losing a loved one is never easy. The emotional impact can be overwhelming at times, which makes dealing with the logistics of your loved one’s estate even more challenging. But if you were named as the beneficiary of a trust or are otherwise positioned to inherit from your loved one’s estate, then you may be left with questions about what that process looks like.

Generally speaking, the estate’s assets are going to be administered by the estate executor and, if trusts are involved, a trustee. These individuals will be tasked with handling creditor claims, managing funds and investments, and making disbursements from the estate as deemed appropriate. They’re positions that carry great responsibility, and mismanagement can lead to harmful financial impacts being felt by heirs and beneficiaries.

Do you suspect that estate funds have been mishandled?

Estate administrators and trustees are subjected to the fiduciary duty. This means that they must put the interests of the estate and named heirs and beneficiaries first. Therefore, if you see any signs of impropriety, then you need to start asking questions to figure out what’s going on.

What are some signs that the fiduciary duty has been breached?

The fiduciary duty can be breached in a variety of ways. But if you have suspicions, then you should be on the lookout for these warning signs:

  • Poor accounting: The trustee or administrator should have clear accounting records, and those records should be submitted to the court periodically. If you can’t make heads or tails out of accounting documents, then you might want to consult with someone who can help you understand them. After all, you might struggle to comprehend the accounting because it’s trying to cover up wrongdoing.
  • Incomplete records: Similarly, those who have breached the fiduciary duty may have incomplete records. If you question the fiduciary’s handling of assets, then you can request records that detail pertinent transactions. If those records can’t be located or won’t be turned over, then you need to pursue the matter further.
  • Commingling assets: The estate’s assets need to be kept separate so that it’s clear which assets remain in the estate ready for disbursal. However, in some instances a fiduciary will commingle estate assets with his or her personal assets, which not only makes it harder to distinguish between the two, but it also significantly increases the likelihood that the fiduciary will use estate assets for his or her own personal use.
  • Conflicts of interest: Remember, fiduciaries are supposed to put the interests of the estate and named heirs and beneficiaries first. Sometimes, though, fiduciaries show favoritism towards certain individuals, whether that be another family member or a creditor. This very well may be inappropriate and justify legal action to correct the issue.
  • Improper handling of trust assets: In some instances, the fiduciary duty is breached because the administrator or trustee poorly handles the estate’s investments. This may include improperly assessing economic conditions and tax implications pertaining to certain investment actions. So, if the estate has seen significant losses due to bad investments, then you’ll want to investigate the matter further.

Protect your interests and your loved one’s estate

Your loved one probably had a very clear idea for how his or her estate was supposed to be handled. Don’t let a wayward fiduciary ruin that. Instead, if you suspect that the fiduciary duty is being breached, consider reaching out to an attorney who is experienced in probate matters to determine your best course of action moving forward.