Indiana Breach OF Fiduciary Duty Damages

What is Fiduciary Duty?

Fiduciary duty is a legal obligation, and the individual (s) is expected to act in good faith, confidentiality, be extra cautious, and in the best interests of the beneficiaries or trust. Besides, fiduciary duty also applies to the relationship between the beneficiary or principal and the fiduciary who acts on their behalf. For this reason, the fiduciary must be careful that there be no conflict of interest to interfere with the interests of the beneficiaries.

Fiduciary Duty Categories

There are several types of fiduciary duties, depending on the beneficiary being served. On the other hand, the ethical and legal responsibilities concerning protecting the beneficiaries’ interest typically include the following:

Duty of Loyalty

One of the main types of fiduciary duty is loyalty. This comprises prioritizing the beneficiaries’ best interests. Moreover, the fiduciary is expected not to make any drastic actions if there is a conflict of interests involving the welfare of the beneficiaries.

Duty of Care

This includes the responsibility to make sound and legal choices when it comes to the interests of the beneficiaries. Plus, it covers the thoughtful weighing of choices when choosing between two options so that you eventually pick what’s best for the beneficiaries.

Duty of Good Faith

This responsibility is all about acting within the constraints of the law to make sure the beneficiaries’ rights are protected. Therefore, the fiduciary shouldn’t do anything that’s considered illegal.

Duty to Disclose

The other type of fiduciary duty is they’re expected to be honest. They need to disclose all appropriate details that could affect their ability to play their role.

Duty of Prudence

Fiduciaries are expected to handle issues and make decisions about the beneficiaries’ interests with the ultimate degree of caution, skill and high-risk awareness.

Duty of Confidentiality

The fiduciary has to be highly confidential about all the details pertaining to the beneficiaries. They shouldn’t use this information, whether spoken or written, for personal gain. But when is probate required in Indiana? Only when the property of the decedent is under their name. Therefore not all trusts go through probate court.

Main Elements of Breach of Fiduciary Duty Claims

There are a handful of reasons that are allowed by courts when someone presents a breach of fiduciary duty claim, precisely for those affected by the breach of fiduciary duty. While jurisdictions are different, there are four main constituents that are vital if a plaintiff is to successfully present their breach of fiduciary duty claim.

Here they are:

The Existence of Fiduciary Duty

The best trust litigation attorney in Indiana will tell you that you need evidence to prove that there was actually a fiduciary duty. Numerous individuals are ethically and legally obliged to behave in an honest and loyal way, though this doesn’t particularly showcase a fiduciary relationship. For this reason, it’s important that there be evidence, either in writing or audio.

The Occurrence of a Breach of Duty

Something else you need to prove is that there was actually a breach of duty. For instance, for a trust contested in Indiana, the breach type differs. Therefore, a trustee could be found guilty of violating fiduciary duty, for example, if they were taking trust funds for personal gain.

But if they are taking trust funds to settle estate and trust taxes there is no breach of fiduciary duty because making sure the taxes are paid are part of their responsibilities. There are many Indiana trust accounting requirements, and it would be best if the fiduciary was familiar with them as well.

Damage Was Caused

The other thing you need to prove is that there was actual damage done. Generally, there are no grounds for violation of a fiduciary duty claim without damage.

So, it’s important to be armed with the right evidence to show the damages done. For instance, you could sue a trustee for selling property belonging to the beneficiaries at a below market value price. This is a conflict of interest especially if the buyer is a friend or relative of the trustee.

Therefore, whether it’s a revocable or irrevocable trust in Indiana, the trustee has to act carefully to avoid being sued.

Evidence of Causation

Causation divulges the damages you have suffered, and also shows how they are directly linked to the violation of fiduciary duty. For instance, if there was property sold, the link could be obvious but the trustee could argue that it was a quick sale, and there were no more interested purchasers.

All these elements beg the question; when do co-trustees have to work jointly in Indiana?Legally, they are expected to act unanimously, though are allowed to work together if it will speed things up or benefit the trust, or estate and beneficiaries.

What Comprises Breach of Fiduciary Duty

An executor or trustee violates their fiduciary duty when they willingly go against their legal responsibilities, don’t know their responsibilities or cannot perform their duties.

Therefore, if they violate their duties, they could be sued, which would cost them financially. For this reason, it is crucial to work with a trust attorney if such a thing happens.

Here are some actions that comprise a breach of duty:

• Failure to disclose important details to the beneficiaries.
• Partaking in acts that compromise the estate or trust.
• Not managing the trust or estate according to the guidelines included.
• Failure to perform their responsibilities.
• Running the trust in a manner that causes conflicts of interest.
• Insisting that the beneficiaries relinquish the fiduciary’s liability.
• Using the estate or trust assets for personal gain.

Yet, there are many more circumstances that the courts view as a violation, and only a good trust attorney can assist you in determining and proving a violation of fiduciary duty and the legal steps you ought to take next, depending on the evidence.

Breach of Fiduciary Duty Consequences

Here are some of the most common consequences of violation of fiduciary duty:

Damage Compensation

If the case results in litigation, compensation for the damages is the most common ruling by a judge. This allows the victim (s) to be compensated for the damages incurred. These compensations will cover all the damages incurred by the perpetrator due to their breach of fiduciary duty.

For instance, beneficiaries might argue that the trustee’s decisions have led to financial loss like selling trust or estate property at a price below market value. If this violation is proven in court, the trustee would be ordered to compensate the beneficiaries.

Punitive Damages

At times, a breach of fiduciary duty could result in punitive damages. These damages exceed compensatory fees and are engineered to punish the perpetrator who breached their duties.

Therefore, these damages deter the perpetrator from performing such acts once more and also send a message to anyone intending to commit such crimes that the court will not go easy on them. Punitive damages are usually ordered in cases that involve malice or fraud.

And while they might not be required to compensate the probate fees in Indiana, while the trust goes through probate, you will be compensated accordingly.

Professional Outcome

Besides the financial damages, professionals might face more consequences that are meant to affect their careers. A violation of fiduciary duty by a lawyer, for instance, could be grounds for a lawsuit of legal malpractice.

Based on the claims made against them, such a violation could lead to them getting debarred. Moreover, the claim could result in the loss of their professional accreditation and license, especially in instances involving professionals like accountants or doctors breaching fiduciary duties.

What to Do When There’s a Breach of Fiduciary Duty

There are multiple signs that an executor or trustee has violated their fiduciary duties, and most of the time it involves a trustee managing the assets as if they own them, and at times this is not as indicated in the trust agreement.

First, it is critical to evaluate the damages incurred by their violation. Frequently, profits are lost because of the poor management of the assets by the executor or trustee. Losses incurred because of their carelessness or negligence are violations of fiduciary duty, therefore they can be included in the damages.

The first thing you need to do is file for a violation of the fiduciary duties petition that clearly and effectively highlights and defines the responsibilities of the trustee or executor and arrange the precise duties written in the trust document so as to come up with a proper claim.

The list of responsibilities will dictate how the damages should be compensated. Next, the breach has to be specified, and this comprises determining the specific duties that were breached. This can also include mentioning any misuse of funds or neglect.

The final step is to list all the damages incurred in detail that are as a result of the trustee’s or executor’s fiduciary duties. This will conclude the petition by showcasing how these violations affected the beneficiaries.

Got Deceived by Your Trustee or Executor? Call us Today!

A trustee or executor is expected to conduct their duties in a specific manner, following a particular code; therefore, when they decide to violate their duties, it is both emotionally and financially frustrating. You have to take them to court, endure the entire process, mourn the death of a loved one, and learn online about an Indiana affidavit of successor trustee- what to know because you might need to present it in court.

Why not rely on the professionals to handle this case of mistrust? Hire a team of professional estate planning attorneys with the right experience and knowledge to handle such matters, like Hess-Verdon & Associates. We also have a probate team that handles probate court cases, so you and your family can mourn in peace without stressing about the legal issues. Contact us today for more information about Indiana’s breach of fiduciary duty.