How do you prove a breach of fiduciary duty?
Fiduciaries are appointed to serve the client or beneficiary’s best interests. Fiduciaries can be any person, from a financial advisor to or trustee of a trust. They are responsible for providing their beneficiaries and clients with the best care, loyalty, and good faith. Fiduciaries sometimes don’t always act in the best interests of their clients. This is called a breaching fiduciary obligation. This article will discuss what constitutes a breach and how to prove it in court. Call Hess-Verdon & Associates anytime at 1-888-318-4430.
What is Fiduciary Duty, and how can it be applied?
Fiduciary duty requires an entity or person to act in their beneficiary’s or client’s best interest. This duty can arise in many relationships, such as attorney-client or trustee-beneficiary and financial advisor-client. Fiduciaries must act in the best faith, loyalty, and care for their beneficiaries or clients.
What is a Breach of Fiduciary Duty, and How can it be prevented?
A fiduciary breach occurs when the fiduciary fails or is not acting in the best interest of the client/beneficiary. This could take many forms, such as self-dealing or misappropriation, failure to disclose conflicts of interest, and even the inability to report on financial matters. The fiduciary, i.e., the Executor or Trustee, may be held responsible for damages if they breach their fiduciary duty.
Types of fiduciary relationships
There are many types of fiduciary relationships.
- Financial advisor-client
- Shareholder of corporate officer
Element of a Breach Of Fiduciary Duty Claim
A plaintiff must prove the following elements to establish a breach of fiduciary obligation:
- Existence of a fiduciary obligation
- Breach of this duty
Proving a breach of fiduciary duty
It can be challenging to prove a breach of fiduciary duties because it involves complicated legal and factual issues. A plaintiff must show that the defendant violated their duty and caused harm to the plaintiff to prove a breach of fiduciary duties. This can be accomplished through expert testimony, documentary evidence, and witness testimony.
In a Breach of Fiduciary duty Lawsuit, Damages
A plaintiff may be entitled to damages if they prove a breach of fiduciary duties. These damages may include actual damages such as lost money or punitive damages meant to punish the defendant’s wrongful conduct.
Defenses against a Breach Of Fiduciary Duty Claim
There are many defenses that a defendant may raise against a claim of breach of fiduciary duties.
Absence of a fiduciary relation: A breach of fiduciary obligation claim cannot be made if there are no fiduciary relations between the plaintiffs and defendants.
Good faith: A defendant who acted with good faith and reasonable care may be exempted from liability for breaching a fiduciary obligation.
Consent: The plaintiff may consent to the actions of the defendant.
Statute of Limitations to File a Breach of Fiduciary Duty Claim
The statute of limitations to file a claim for breach of fiduciary duties varies from state to state, depending on each claim’s nature. The plaintiff must file the claim within a specified period from the date of the breach or the date the plaintiff discovered it.
How to Prevent a Breach of Fiduciary Duty
It is essential to:
- Make sure you do your research before choosing a fiduciary.
- You can monitor the actions of the fiduciary and ask questions if necessary.
- Make a written agreement.
Both the beneficiary and the fiduciary can suffer severe consequences if they are found to have breached their fiduciary duties. The plaintiff must prove that the defendant violated their duty and that the breach injured that plaintiff. The plaintiff could be eligible for damages if they are successful. It is essential to carefully choose a fiduciary, keep an eye on their actions and make a written agreement. This will prevent any breach of fiduciary duties.
What is a fiduciary obligation?
Fiduciary duty is a legal obligation requiring an entity or person to act in their client’s or beneficiary’s best interest.
What is a breach of fiduciary duty?
A fiduciary breach occurs when the fiduciary fails or is not acting in the best interest of the client/beneficiary.
How can you prove that there was a breach of fiduciary obligation?
A plaintiff must prove the existence, breach, causation, damages, and fiduciary obligation to establish a breach.
What damages can you recover from a lawsuit for breach of fiduciary obligation?
A plaintiff who proves a breach of fiduciary duties may be eligible for punitive and actual damages.
How do you avoid a breach of fiduciary obligation?
It is essential to carefully choose a fiduciary, monitor their actions, and make a written agreement detailing their duties and responsibilities.
California Trust & Probate Litigation Lawyers
Are you looking for an estate litigation attorney in your area? When it comes to the practice of Trust and estates, it can be difficult finding an attorney that’s experienced in handling your specific issues. Siblings contesting the trust?
- Can a Trustee sue on behalf of the trust
- Can a Trustee be held personally liable
- Can a Trustee remove a Beneficiary from a trust
- Settling a Trust After Death
- Being a Trustee of a Trust
How Do You Sue a Trustee of a Trust? What to Consider!
How Do You Sue a Trustee of a Trust? Use an Expert Trust Litigator Suing a trustee of a trust can be a complicated and challenging process. We provide an overview of the steps involved in suing a trustee, including understanding the grounds for suing, the legal...
Trust Litigation Attorney Fees: What You Need to Know
Trust Litigation Attorney Fees Trust litigation can be a complex and overwhelming process, often necessitating the expertise of an experienced attorney. When hiring a trust litigation attorney, cost should always be considered - we'll look at factors like fee...
Falsely Accused of Undue Influence – What to Understand
ADDRESSING FALSE ALLEGATIONS OF UNDUE INFLUENCE FOR TRUSTEES IN ESTATE PLANNING As a trustee, your role in managing and overseeing an estate plan is essential. You are entrusted with the responsibility of ensuring that the testator's wishes are carried out, and their...