Sorting out an estate after an individual’s passing isn’t always as easy as it seems. Sure, if the individual left a detailed estate plan then the instructions for disbursement of estate assets should be pretty clear. But these matters are handled by estate executors and trust administrators. If you’re fulfilling one of those positions after your parent’s passing, or if you’re a beneficiary of an estate and have concerns about how the estate’s assets are being handled, then you should make sure that you fully understand the fiduciary duty.
What is the fiduciary duty?
In short, the fiduciary duty is a duty owed to another individual through which that other individual’s interests are a priority. Therefore, the fiduciary acts on behalf of another person, while also acting in good faith to put that other person’s interests ahead of their own. That might sound simple enough, but when it comes to investing trust assets or figuring out how to pay estate funds, the matter can become quite complicated. If you want to avoid being accused of breaching the fiduciary duty, or if you think that an estate administrator or trustee has breached their fiduciary duty, then you may want to read on.
Signs that the fiduciary duty has been breached?
The fiduciary duty in the context of probate and estate administration is breached more often then people think. Yet, in far too many cases, people fail to seek accountability. Being proactive in preventing and stopping a breach of the fiduciary duty can go a long way toward protecting your financial interests and your lost loved one’s wishes. So, here are a few red flags that may tell you that the fiduciary duty is being breached:
- Bad record keeping: A fiduciary has a duty to keep accurate, complete, and up-to-date records. If you suspect that assets have gone missing but you can’t find a paper trail that explains where those assets went, then there’s probably a breach of the fiduciary duty. The same holds true even if the fiduciary can’t produce certain records. Make sure that you’re keeping tabs on these records. If receipts, invoices, and other financial documents can’t be produced upon request, then you should dig deeper because something isn’t right.
- Commingling assets: In a lot of cases involving breach of the fiduciary duty, the fiduciary has mixed estate assets with his or her assets. These fiduciaries then tend to use those assets for their own personal gain. This is a major breach of the fiduciary duty. So if you recognize that assets have gone missing or that the estate executor or trustee is suddenly making bigger purchases than they did before, consider whether you can trace where estate assets have gone.
- Favoritism: Fiduciaries have a duty to act impartially. In many instances, though, fiduciaries favor one beneficiary over another, or they may show more deference to a certain creditor. This could be a sign that the fiduciary duty is being breached, so make sure that you’re tracking this and are ready to address it head-on.
Find help for your probate and estate administration needs
Regardless of which side of probate and estate administration you’re on, you can be heavily impacted by the fiduciary duty and how it plays out. After all, your financial wellbeing could be on the line. That’s why if you want to protect your interests as fully as possible, then you may want to speak with an attorney who is competent in this area of the law.