Why knowing about the fiduciary duty is important

Why knowing about the fiduciary duty is important

On Behalf of | Nov 30, 2020 | Probate |

Estate plans are meant to give clear guidance as to how assets are to be distributed upon death. While many estate plans are very clear and there is little dispute as to their validity, issues can still arise during the administration of the estate. For example, beneficiaries of a trust can have disagreements with a trust administrator, also called a trustee, about how trust assets should be invested and when disbursements should be made. There can even be concerns that a trustee is using trust assets for his or her own benefit. When these situations arise, probate litigation might be necessary.

The fiduciary duty

Those who administer estates, including trusts, are bound by a fiduciary duty. This means that they are required to act in the best interests of another individual, which would be the beneficiary to a trust or other estate planning vehicle. Sometimes trustees misunderstand their duties because they technically hold legal ownership of the trust assets, but the beneficiary retains equitable title to those assets.

Proving breach of fiduciary duty

Regardless of which side of a fiduciary duty dispute you fall on, you need to know some of the factors that a court will look at to determine whether a breach of that duty has occurred. A court may look at the care and diligence conducted by the trustee, and whether or not he or she used his or her skill when making decisions that involve trust assets. Additionally, a fiduciary has to be honest and fully disclose information pertaining to the trust and its assets to beneficiaries. So, if it can be shown that there’s a conflict of interest between the fiduciary duty and actions taken by the fiduciary, then breach may have occurred.

Dealing with these matters on your own can be challenging

Far too many people try to handle probate matters on their own. This can be dangerous, putting your financial wellbeing, and the intent of the estate, at risk. Therefore, if you want to ensure that you’re protecting yourself as fully as possible in these matters, then you might want to consider seeking legal assistance.