BREACH OF FIDUCIARY DUTY
A Successor Trustee has a fiduciary duty and is given responsibilities from the probate court to carry out the wishes of the Trustor and Beneficiaries while staying within their fiduciary duty of loyalty, impartiality, prudent investing, fiduciary accounting, defending against claims, and self-dealing are at the forefront before their own personal wishes.
A breach of fiduciary duty occurs when a trustee is either knowingly committing a breach of fiduciary duties (criminal intent) or simply unaware or overwhelmed. If you are a trustee and needing guidance, Hess-Verdon & Associates law firm have been providing legal services throughout the state of California for over 30+ years. Call today at 888-318-4430 or fill out our contact form. Either way our law firm will call you straight away and help you build an attorney client relationship.
How do you prove breach of fiduciary duty?
Complaint Breach of Fiduciary Duty Trustee
Have a complaint regarding the Breach of Fiduciary Duty by the Trustee? If so, it’s important to understand key aspects of the Trust Administration process to identify where the Trustee may have failed in their fiduciary responsibilities.
CAN YOU SUE A TRUSTEE
Many beneficiaries wonder, “Can a Beneficiary sue a Trustee?” The answer is yes; it’s a fundamental right for a beneficiary to protect and uphold the grantor’s wishes. While it can be challenging, success is possible with the right legal approach and good faith actions.
However, you cannot sue a Trustee if you won’t benefit from the trust’s asset distribution. Thus, if you’re not an heir or beneficiary, you may not have access to the Trust document or legal standing to sue.
Suing trustee for breach of fiduciary duty
In California, suing a trustee for breach of fiduciary duty requires proving that damages were incurred due to the breach. Compensation depends on demonstrating a loss, which doesn’t necessarily have to be financial but must be provable and directly related to the trustee’s actions.
Suing a Trustee for Breach of fiduciary duty
If you are, however, a Beneficiary, heir, etc., then make sure your legal actions are warranted by speaking to a Trust Litigation Attorney. Suspecting fiduciary malfeasance and convincing the probate court is doable, but a tried and true trust litigator is necessary to combat the Trustee’s attorney. To prevail in a breach of fiduciary duty claim, you should prove the following elements:
- Duty – The Trustee has a duty of good faith and fair dealing, a duty of full disclosure.
- Breach – Breaches come in the form of the following: self-dealing, misappropriation of Trust funds, neglect of responsibilities, and others.
- Damages – Beneficiaries should have suffered losses, for which the breach was the proximate cause.
Key take away: The Trustee will use the funds of the estate to fight the complaint.
Key take away: If the Trustee if found guilty of breaching their fiduciary duty, there can be civil and criminal liability, including paying back all Trust Administration fees, assets that may have been sold, and so forth.
What Constitutes a Breach of Fiduciary Duty?
What constitutes a breach of fiduciary duty? Well first, let us go over the responsibilities of the Trustee, Executor, and Estate Administrators to understand their responsibilities better. First and foremost, any action a Trustee takes should show their efforts were for the Trustor and beneficiaries wherein their duty of loyalty, impartiality, prudent investing, fiduciary accounting, defending against claims, and self-dealing are at the forefront before their wishes. Within the Trust are sections describing how the beneficiaries and heirs will receive their part of the estate. With that said, the Trustee should maintain transparency at all times with the beneficiaries.
So what constitutes a breach? Below are just some reasons to sue a Trust for breach their fiduciary duty:
- Trustee refuses to give an accounting: When mismanagement of a Trust is at its highest probability, typically, the Trustee and Co-Trustees refuse to provide updates to the beneficiaries. Not giving periodic updates is a sure sign for seeking counsel. Note: The Trust is a fiduciary arrangement that allows a third party, or Trustee, to manage and hold assets on behalf of a beneficiary or beneficiaries.
- Trustee stealing from a Trust: Stealing from a Trust, i.e., embezzlement, is a crime. Note: You cannot threaten to have someone charged criminally in hopes of taking advantage of their situation. Blackmailing exposes you to possible criminal liability.
- Self-Dealing – Self-dealing includes actions such as purchasing assets from the Trust, borrowing from the Trust even if it was repaid, investing in the Trustee’s own business, etc.
The bottom line, transparency is key to any successful Trust Administration process.
Breach of fiduciary duty Penalties
What is the penalty for breach of fiduciary duty? The most frequent penalties for breach of fiduciary duty include suspension or removal as trustee or executor and the payment of money damages, attorney fees, and court costs.
Sue Trustee for Breach of fiduciary duty
Suing a Trustee will be held in the city court location based on the trust locality. Now, to sue a Trustee, you have to prove the Trustee breached their fiduciary duty. The fiduciary duty includes many possibilities, including the following: The Trustee is refusing to give an accounting to the beneficiaries.
Can Breach of fiduciary duty be Criminal Offense
Yes, technically you can go to prison for breaching fiduciary duty. This includes theft, fraud, embezzlement. Most often, however, prosecutors lack the resources to prosecute fiduciaries who break their duties. Instead they turn to civil courts for resolution.
How Do I File a Breach of Fiduciary Complaint Against a Trustee
To prove a breach of fiduciary duty, legal documents of suspicious activity is needed. You are required in order to show reasonable expectations, i.e., understanding time-frames, etc., with documentation following up with your concern with the Trustee. The next step is to find a highly sought out trust ligation firm that specializes in your exact case scenario. Moreover, ask questions regarding court time.
We understand these are trying times. Here at Hess-Verdon, we have worked with thousands of clients throughout our tenure, and we are here to help you make the right decision.
You can call us today at 888-318-4430 and set up an appointment today.
Is Breach of Fiduciary Duty a Crime
A breach of fiduciary duty is not a criminal act but can be associated with one. For example, if the Trustee was self-dealing, e.g., selling a property, for instance, way below fair market value to a friend or themselves, then a court may see this as a form of embezzlement. Their fiduciary relationship with the beneficiaries was not for their best interests. Embezzlement is a crime. In the case of negligence, then it’s not a crime, but the beneficiaries still may go after the Trustee in civil court.
How Long does it take to Settle a Trust
Settling a Trust is a subjective question because each Trust is slightly different from another. For example, there may be several properties to sell, while another Trust has no real estate. But if you are looking for an average time-frame, Trust Administration is between 12-18 months.
What Constitutes a Breach of Fiduciary Duty?
To understand what constitutes a breach of fiduciary duty, it’s crucial first to grasp the responsibilities of Trustees, Executors, and Estate Administrators. Their actions should prioritize the interests of the Trustor and beneficiaries, adhering to principles like loyalty, impartiality, prudent investing, fiduciary accounting, defending against claims, and avoiding self-dealing. The Trust should outline how beneficiaries and heirs are to receive their shares, with the Trustee maintaining transparency throughout the process.
A breach can occur under several circumstances, including:
- Trustee refuses to give an accounting: Lack of communication and updates from the Trustee or Co-Trustees can indicate mismanagement and warrant legal advice.
- Trustee stealing from a Trust: Embezzlement, or stealing from a Trust, is illegal. Using threats of criminal charges for personal gain can also lead to criminal liability.
- Self-Dealing: Actions like buying assets from the Trust, borrowing Trust funds, or investing in personal ventures using Trust resources are considered self-dealing.
Transparency is essential for successful Trust Administration.
How Do I File a Breach of Fiduciary Complaint Against a Trustee
To file a complaint, documentation of any suspicious activity is necessary. This helps establish reasonable expectations and concerns regarding the Trustee’s actions. The next step is to consult with a specialized trust litigation firm experienced in similar cases and inquire about the legal process.
Hess-Verdon is committed to assisting clients through these challenging times, backed by extensive experience in handling a wide range of cases.
Is Breach of Fiduciary Duty a Crime
While a breach of fiduciary duty itself is not a criminal offense, it can be associated with criminal acts, such as embezzlement in cases of self-dealing. However, negligence without criminal intent might not constitute a crime but can still lead to civil litigation by beneficiaries.
How Long does it take to Settle a Trust
The time to settle a Trust varies based on its specifics, such as the number of properties involved. On average, Trust Administration can take 12-18 months.
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