Serving as a trustee can be an honor, but it can also be enormously stressful. After all, you’re tasked with putting the financial interests of others ahead of your own, and when it comes to money, every minor misstep is placed under the microscope. While most trustees are able to carry out their fiduciary duties with only minor incidences with beneficiaries, or no conflict at all, other trustees end up facing allegations that they have breached their fiduciary duty.
Defending against claims of breach
If you’ve been accused of breaching your fiduciary duty, then you’re probably really worried. The good news, though, is that you might have a number of defense options available to you. A number of these defenses are based on fundamental fairness. Here are some of them:
- Laches: Here, you simply argue that the beneficiary simply waited too long before raising the issue, and that such delay amounts to acquiescence. In other words, you shouldn’t be held liable for something that the beneficiary seemed to not have a problem with for a long time.
- Ratification: Ratification occurs when a beneficiary, with full knowledge of the circumstances, either explicitly or through act, approves of your actions as a trustee.
- Waiver: With waiver, the beneficiary, either through words or actions, intentionally gives up a right.
- Estoppel: Estoppel often involves inducement to act based on misrepresentation of a material fact. Therefore, if you were misled in some way and you relied on that information to act in a certain fashion, then the other party may be estopped from claiming that you breached your fiduciary duty.
Know how to aggressively protect yourself
These are just a few of the ways in which you can try to defend yourself against allegations of breach of the fiduciary duty. To increase your chances of success here, you’ll need to not only know the law, certainly more fully than touched upon here, and the facts in play, but also how to develop compelling legal arguments that are on point. There’s simply too much on the line in these cases for you to leave those arguments to chance. That’s why it might be best for you to discuss the allegations against you with an attorney who is experienced in this area of the law.