Breach of Trustee Dutys
A fiduciary is an entity in a position of trust and duty to another person. It could be an attorney, a trustee, or a board of directors. They have a fiduciary duty, in this case, to act in the best interest of the client, the beneficiary, or the shareholder. A breach of fiduciary happens when these people act in their best interest or other persons’ interest other than the persons in their trust.
What is a Breach of Fiduciary?
When there is an understanding between John and Sitevolt Ltd, for the company to hold and manage his assets after his death, Sitevolt Ltd is the fiduciary. According to his requirements, this company is expected to manage John’s assets as stipulated in the agreement contract.
If Sitevolt misappropriates John’s funds, using it in a manner that he didn’t prescribe, that amounts to a breach of fiduciary or breach of trust. In other words, the company has acted in a way that is against John’s best interest. The misappropriation could be for the benefit of the company owners or other persons, except for John and his heirs.
For a case to merit a breach of fiduciary duty, these elements should be present:
Relationship: The fiduciary is mandated to manage either money or handle defined processes on your behalf. In this case, as a beneficiary of a trustee, investor, or legal client, you need to establish that there was a relationship of trust with the fiduciary.
Obligation: The accused shall owe a fiduciary duty to the plaintiff. An example is an obligation that a trustee owes to the recipients of a trust, the obligation owed by attorneys to clients, majority shareholders to minority shareholders.
Breach: Next, you should bring up evidence of the breach. Show that the fiduciary violated their mandated responsibility and acted in a way that is against your interests.
Damages: For any legal restitution, you need to show that the breach caused you losses. If the breach didn’t cause losses, you could not claim compensation.
Causation: Similarly, one shall show a direct relationship between the breach and the losses suffered. If the damages suffered are not related to the violation, you cannot recover damages.
Breach of Fiduciary Duty Examples
- Neglecting to make required distributions in a trust or will
- Failing to report to the beneficiaries
- Misappropriation of funds
- Self-dealing or intermixing of estate assets with personal finances
Legal Counsel for Beneficiary
If you are a beneficiary in trust and believe that the trustee is not acting in your best interest as stipulated in terms of the trust, you might have a case. A trust litigation attorney can investigate the matter and determine whether it merits as a breach of fiduciary.
If there is a breach of trust, the attorney files a court order to compel the trustee to release the trust assets’ financial report. Your attorney works closely with an accountant to ascertain an accounting for every expense.
If there are discrepancies, the attorney files a breach of fiduciary duty lawsuit on your behalf.
For cases that merit, the judge can order the trustee to repay the trust. Other remedies might include:
- Removal and replacement of the trustee
- Compelling the trustee to fulfill fiduciary duties
- Probate or removing some assets from the trust
- Legal Counsel for the Fiduciary
It’s essential for trustees to work with an estate planning attorney for proactive legal guidance throughout the management or distribution of the assets in a trust or will.
As a fiduciary, you have a right to retain and work with an estate planning attorney-the fee is paid by the trust and not you. The best legal counsel can save you from an unintentional breach of fiduciary duty.
As a fiduciary, you have a moral and legal imperative not to use the assets in a trust for personal gain. Your actions needs to be void of personal interest or self-gain. But sometimes, the lines are gray, and the terms of the agreement are unclear. A trust attorney helps to ensure that your actions do not lead to personal liability for you.
Let’s fight for you.
We can provide you the right legal counsel, given our breadth and depth of trust litigation experience. If you have suffered a breach of fiduciary as a beneficiary or have a lawsuit brought against you as a trustee, call us. We will guide you and fight for you.
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