What it Means to Breach Fiduciary Duty
When it comes to estate and trust administration and probate, a commonly used term that you will hear is "fiduciary duty." What does fiduciary duty mean and what does it have to do with estates? A fiduciary duty is the legal duty to act solely for another party's best interests. People who owe such duties are known as fiduciaries.
Individuals to whom this duty is owed are called principals or beneficiaries. Fiduciaries cannot profit from their relationship with their principals unless they have received the express consent from the principal. Fiduciaries are expected to avoid any conflicts of interest between themselves and their principals. In the U.S. legal system, a fiduciary is held to the strictest duty of care and a breach of fiduciary duty is an actionable offense.
Examples of fiduciary relationships include agents under a power of attorney, trustee of a trust, accountants and their clients, investment brokers and their clients, guardians and wards, and attorneys and their clients. In the context of estate administration, fiduciary relationships include executors or administrators and beneficiaries, as well as trustees and beneficiaries. In estate or trust administration, the fiduciary is the individual who is legally appointed and authorized to manage the estate's or trust's assets for the benefit of the beneficiaries. The executor, administrator or trustee manages the assets for the benefits of another person rather than his or her own benefit.
Fiduciary duties require that executors and trustees act solely in the best interests of the beneficiaries named in the will or trust, free of any self dealing, conflicts of interests, or another form of abuse for personal advantage. A claimant does not need to prove criminal. The claimant must show that the defendant occupied a position of trust or a fiduciary relationship and that defendant breached that duty and benefitted personally.
A beneficiary may bring an action against an executor or a trustee who caused harm to the estate or trust assets.Following are some examples of how an executor, administrator or trustee can breach their fiduciary duty:
- Using assets for their own personal advantage
- Any acts or concealments or intentional omissions intended to defraud or gain an advantage
- The failure to pay debts and claims against the estate
- The failure to file and pay all necessary tax returns
- The refusal and/or failure to follow the directions in the will or trust document
- Providing inaccurate accountings to the court and beneficiaries with gross errors or omissions
REPRESENTING CLIENTS ON BOTH SIDES OF ESTATE LITIGATION
Whether you are a beneficiary who believes an executor or trustee has breached their fiduciary duty or if you need to defend an estate against such claims, you should immediately discuss the matter with an experienced Fairfax estate litigation attorney. At Hale Ball Carlson Baumgartner Murphy, PLC we have nearly 50 years of combined experience handling estates and litigation matters. No matter what issue you are facing, we can explain your rights and responsibilities under the law and we can inform you of what legal remedies are available at your disposal.
Since 1980 the AV-rated law firm of Hale Ball has served the legal needs of individuals and businesses. Our team of attorneys include lawyers named to Super Lawyer and Rising Star lists, as well as attorneys with advanced legal degrees, specialty certifications and lawyers who teach their areas of practice to other lawyers.
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