A fiduciary duty, as outlined by the legal system in the United States, is used to describe a relationship that exists between parties that obligates the fiduciary to act solely in the best interests of the other party or parties. In other words, a fiduciary is a person or professional entity that takes on a position of trust and responsibility for another.
Some common examples of people with fiduciary duties are personal representatives, executors, trustees, administrators, guardians, and agents under a Power of Attorney.
An executor of an estate has a duty to bring the estate of a decedent to a close as quickly as possible, maximizing the beneficiary’s inheritance. To do this, the executor needs to gather the assets of the estate, settle any and all debts, pay the decedent’s funeral and estate administration expenses, handle any applicable tax issues, and then distribute what remains in accordance with the wishes set forth in the decedent’s will or trust.
When it comes to selecting the best possible candidate to act as executor or trustee for estate plans, more than just friendship or family relationship should be considered. Qualities to consider when selecting an executor or trustee for an estate include:
- Honesty and integrity
- A knowledge of financial matters
- Tax experience
- Financial responsibility
Unfortunately, in some cases, the executor or trustee appointed to protect and distribute an estate, breach the position of trust they are in and help themselves to estate assets. When this occurs, it is referred to as an executor breach of fiduciary duty.
What can you do if you suspect that the executor, trustee, or other agent is being intentionally negligent, untrustworthy, or committing fraud? If you are an heir, beneficiary, creditor, or some other individual that is affected by the estate, you can take legal actions to remove the breaching executor or trustee and recover damages.
Some common examples of a breach of fiduciary duties include:
- Misappropriating funds from the estate or trust
- Acting in one’s own self-interest while disregarding the beneficiaries’ intent
- Selling assets at prices that are unfavorable to the estate
- Paying themselves large fees to act as executor
- Missing deadlines for court documents, creditors, and other time-sensitive actions
- Failing to comply with laws and regulations pertaining to trust or estate administration
- Failing to respond to or take actions with respect to beneficiaries’ requests
Speak to an attorney about your case
The consequences of a breach of fiduciary duty are many, ranging from reputation damage to loss of a license and monetary penalties. If you suspect that you’ve been a victim of breach of fiduciary duty, you need to speak to an attorney.
At the Leo Law Office, we focus on trust and estate litigation. Our attorneys are experienced when it comes to addressing estate planning issues, especially when it comes to asset protection.