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Red flags that the fiduciary duty has been breached

On Behalf of | Jan 17, 2025 | Probate & Estate Litigation |

A well-crafted estate plan seeks to avoid litigation. Yet not everything is within the control of the individual who created the estate plan. After all, asset distribution and trust management are left to those named to positions by these estate plans or appointed by the court. While these individuals have a duty to act in the best interests of the estate and its trustees, known as the fiduciary duty, they often fail to live up to expectations. Although this can be discouraging, it can also cause significant financial harm to the estate and the interests of the estate’s beneficiaries.

If you suspect that your loved one’s estate is being mismanaged in some fashion, then you may want to consider legal action. But spotting breaches of the fiduciary duty can be hard to do, which is why in this post we want to look at some red flags that you should be cognizant of and bring to the attention of your attorney if spotted.

Key indicators that the fiduciary duty has been breached

Serving as an estate executor or a trustee is a significant obligation. You have to manage assets with care, ensuring that they aren’t wasted, and distribute them to beneficiaries in accordance with the law and the controlling estate plan. Sadly, though, this doesn’t always happen. Be on the lookout for these signs that the fiduciary duty has been breached in your case:

  • Assets have disappeared: If assets have gone missing without justifiable excuse, then you need to quickly investigate to determine what’s happened. In many of these situations, the executor or trustee has taken assets for their personal use, thereby robbing the estate and its beneficiaries. This is illegal and can lead to significant legal consequences. So, if it appears that assets have gone missing from your loved one’s estate, investigate the matter further to see if you can find answers as to where they’ve gone.
  • Assets have ben commingled: Sometimes those who have a fiduciary duty simply don’t know how to correctly manage estate funds. In some of these instances, the individual with the fiduciary duty commingles estate assets with their own. This makes it difficult to discern where the estate’s assets end and the individual’s personal assets begin. This is often a sign of misappropriation, but it can also be indicative just plain poor management.
  • Conflicts of interest: The individual managing your loved one’s estate or a trust within the estate need to remain free from conflicts of interest. For example, if they use estate funds to invest in their own business, then there’s a good chance that a conflict of interest has arisen leading to a breach of the fiduciary duty. This is unacceptable and needs to be stopped immediately.
  • Accounting is poor: Those who carry a fiduciary duty are responsible for keeping an accounting of their actions. This lets beneficiaries know how estate assets are being managed. If these records are lacking in detail, show concerning activity or are missing altogether, then there’s a good chance that the fiduciary duty has been breached and legal action is warranted.

Fight to recover compensation when the fiduciary duty has been breached

If the fiduciary duty has been breached in your situation, then you need to act now to find accountability, protect your loved one’s estate and recover compensation for any harm that’s been caused to you. But you’ll need evidence to support your claim, so act now to build the effective breach of fiduciary case you need to be successful.