A trustee is tasked with ensuring that a trust is properly managed. They’re responsible for tracking income and expenses, and they must distribute trust assets to identified beneficiaries in accordance with the terms of the trust’s documentations. These are heavy obligations that shouldn’t be taken lightly. Yet, all too often trusts are mismanaged, causing financial damage to the trust’s viability and jeopardizing the support that the estate’s creator intended for their loved ones.
If you’re a trust beneficiary and suspect that something is off with the administration of the trust from which you receive funds, then you shouldn’t just sit back and hope for the best. After all, doing so may result in damage being caused that’s otherwise avoidable. But how do you know when something is so wrong that you need to act?
Signs that the fiduciary duty has been breached
Trustees act in a fiduciary capacity, meaning that they have to prioritize the interests of the estate and its beneficiaries. If they breach this duty and you’re harmed as a result, then you may be justified in taking legal action. So, as time goes on, be on the lookout for these signs that the fiduciary duty has been breached:
- Missing documentation: Trustees are required to keep documentation that shows the financial operations of the trust. If this documentation is missing, or if the trustee refuses to turn this documentation over, then there’s a good chance that they’re trying to hide something.
- The numbers don’t add up: Even if you secure the trust’s accounting records, you might find that there are inconsistencies or that the numbers simply don’t make sense. When this is the case, you may want to secure another opinion on the accuracy of the accounting. If it’s off, then the fiduciary duty may have been breached.
- The trust’s terms aren’t being followed: The distribution of trust assets should be carried out as delineated by the trust’s documents. If the trustee fails to abide by these terms, then you have an argument that the trustee isn’t acting in your best interests or the best interests of the estate. So, carefully review the trust’s documentation to ensure you have a firm understanding of how its assets are supposed to be distributed.
- Bad decisions: A trustee must act reasonably when dealing with the trust’s assets. Yet, this doesn’t always happen. Sometimes trustees make decisions that are harmful to the trust and its beneficiaries, such as when they sell trust assets for far less than they are worth without proper justification. This can cut you off from any income that would’ve been generated by those assets, and the money you get from the sale can pale in comparison to what you should’ve gotten. This, then, can constitute a breach of the fiduciary duty.
- Conflicts of interest: If it’s clear that the trustee favors certain family members over you or they are using the trust’s assets to financially advantage their own friends or family members, then there’s a good chance that the trust’s assets are being mismanaged.
Find accountability for a breach of the fiduciary duty
You shouldn’t be taken advantage of by a greedy or reckless trustee. But they’re only going to be held accountable if you take legal action to protect your interests. Therefore, if you suspect that a trustee is mismanaging trust assets or has otherwise acted contrary to your interests, then now is the time to consider your legal options and to build a strong breach of fiduciary duty case that could lead to the recovery of deserved compensation.