Managing an estate can be difficult. But there are laws in place meant to protect the estate in question and the interests of named beneficiaries. If you’re someone who has been named an heir to an estate, then you need to understand the obligations of the estate’s executor and trustees, that way you can ensure that your interests are protected.
One of the requirements of these individuals is that they act in a fiduciary capacity. This means that they’ll put the interests of the estate and its beneficiaries ahead of their own. That might sound like common sense, but you’d be surprised by the number of times that the fiduciary duty is breached, thereby causing significant financial harm to those beneficiaries and the estate itself.
That’s why it’s critical that you know how to spot breach of the fiduciary duty. If you don’t, then a named executor or trustee could take advantage of you and the estate, leaving you in a worse financial position than intended by your loved one.
There are several red flags that you might see when the fiduciary duty has been breached. This can include:
- Assets go missing without explanation or with poor explanation.
- The accounting records submitted by the executor or trustee are incomplete or otherwise lacking in some fashion.
- The executor or trustee shows favoritism towards certain beneficiaries or creditors.
- The estate’s assets have been commingled with those of the executor or trustee.
- You can’t get a hold of the person responsible for managing the assets in question.
- The executor or trustee is unable to answer your questions about the estate’s assets or their distribution.
There are other signs that the fiduciary duty has been breached, so if you suspect that the estate in question is being mishandled, then you should act quickly to investigate the matter and perhaps even take legal action.
How can you remedy a breach of the fiduciary duty?
Although a potential breach of the fiduciary duty can be stressful, the good news is that there are steps you can take to try to remedy the situation. This includes doing the following:
- Pinpointing what actions potentially constitute breach as best as possible.
- Gathering as much evidence as possible, which may include financial records, communications with the fiduciary and witness accounts.
- Demanding a full accounting so that you can gain as clear of a sense as possible of the estate’s financial positioning and how assets have been managed and disbursed.
- Speaking to your attorney so that they can help you analyze the facts in play to determine if there’s been a true breach of the fiduciary duty.
- Utilizing mediation or some other form of settlement negotiations to see if you can find favorable resolution to the issue without the need for all out litigation.
- Pursuing legal action, if warranted to do so, by filing a lawsuit against the individual who holds the fiduciary duty.
Don’t let your loved one’s vision of the future be damaged by a rogue executor or trustee
Your loved one put a lot of work and thought into building their wealth and establishing their estate plan. But all of that can be eviscerated by an individual who fails to adhere to their fiduciary obligations. Don’t let that happen in your situation. Instead, stay alert, look for signs of breach of the fiduciary duty and act swiftly to take any action necessary to correct behavior that’s detrimental to you or the estate.