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Sue Trustee for Breach of Fiduciary Duty

A trustee is a person or organization appointed to manage the assets of a trust on behalf of the beneficiaries. They are responsible for ensuring the trust’s assets are used according to the trust’s terms and in the beneficiaries’ best interests.

Fiduciary duty of a trustee

A trustee owes a fiduciary duty to the beneficiaries of the trust. This duty requires the trustee to act with care, loyalty, and impartiality when managing the trust’s assets.

by | Apr 14, 2023

Breach of fiduciary duty

Types of breach of fiduciary duty

A breach of fiduciary duty occurs when a trustee fails to fulfill their responsibilities in managing the trust. Examples include the following:

  1. Mismanagement of assets
  2. Failure to provide accurate accounting
  3. Self-dealing, and neglecting to distribute assets.

Consequences of breaches

Breaches of fiduciary duty can result in financial losses for beneficiaries and potential legal action against the trustee.

Grounds for suing a trustee

Mismanagement of trust assets

A beneficiary may sue a trustee if they believe the trustee has mismanaged the trust’s assets, resulting in financial loss.

Failure to account

Trustees are required to provide accurate and timely accounting of trust assets. If a trustee fails to do so, beneficiaries can take legal action.


A trustee may be sued for self-dealing if they use the trust’s assets for their own personal benefit rather than the beneficiaries.

Failure to distribute assets

A trustee can be sued if they neglect to distribute assets according to the terms of the trust.

How to sue a trustee for breach of fiduciary duty

Gathering evidence

Before filing a lawsuit, beneficiaries should gather evidence of the trustee’s breach, such as financial records and communications.

Legal representation

Beneficiaries should seek legal advice from an experienced attorney specializing in trust and estate litigation.

Filing a lawsuit

The attorney will file a lawsuit on behalf of the beneficiary, outlining the breaches of fiduciary duty and the damages sought.

Settling vs. going to trial

Parties may sometimes opt to settle the dispute out of court. However, the case may proceed to trial if a settlement cannot be reached.

Potential outcomes of a lawsuit

Removal of the trustee

If a court finds that a trustee has breached their fiduciary duty, they may order the Removal of the trustee and appoint a new one.

Compensation for damages

The court may also order the trustee to compensate the beneficiaries for any financial losses resulting from the breach of fiduciary duty.

Distribution of assets

If the trustee needs to distribute assets according to the terms of the trust, the court may order the distribution to be carried out.

Defenses for a trustee

Good faith

A trustee may argue that they acted in good faith and made decisions based on the information available at the time. If the court agrees, the trustee may avoid liability.

Beneficiary consent

If the beneficiaries had previously consented to the trustee’s actions, the trustee might use this as a defense against allegations of breach of fiduciary duty.

Statute of limitations

A trustee may argue that the statute of limitations has expired, preventing the beneficiaries from taking legal action.

Avoiding disputes

Open communication

To avoid disputes and potential lawsuits, trustees should maintain open lines of communication with beneficiaries and keep them informed about the management of the trust.

Regular updates

Providing regular updates and accurate accounting to beneficiaries can help prevent misunderstandings and mistrust.

Seeking professional advice

Trustees should seek professional advice from attorneys, financial advisors, and other experts to ensure they are properly fulfilling their fiduciary duties and managing the trust.

Trust Litigation Attorney


Suing a trustee for breach of fiduciary duty is a serious matter that can have significant consequences for both the trustee and the beneficiaries. Beneficiaries should gather evidence, consult an experienced attorney, and carefully consider their options before proceeding with a lawsuit. Trustees can minimize the risk of litigation by communicating openly with beneficiaries, providing regular updates, and seeking professional advice.


  1. Can a trustee be held personally liable for a breach of fiduciary duty?
    • Yes, a trustee can be held personally liable for any financial losses resulting from a breach of fiduciary duty.
  2. How long do beneficiaries have to sue a trustee for breach of fiduciary duty?
    • The statute of limitations for suing a trustee varies depending on the jurisdiction. It is essential to consult with an attorney to determine the specific time frame in your case.
  3. Can a trustee be removed without a lawsuit?
    • In some cases, a trustee may be removed without a lawsuit if all parties agree to the Removal and appoint a new trustee.
  4. Are trustees entitled to legal representation in a lawsuit?
    • Yes, trustees have the right to legal representation in the event of a lawsuit. They may also use trust funds to cover their legal expenses, provided they have yet to be found to be in breach of their fiduciary duties.
  5. Can a trustee be sued for decisions made in good faith?
    • A trustee may be sued for decisions made in good faith if the findings result in financial losses for the beneficiaries. However, if the court agrees that the trustee acted in good faith, they may avoid liability.
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