When someone passes away, there are a number of details that must be tended to and resolved. This includes locating heirs, paying taxes, settling debts and distributing assets. These tasks are handled by a fiduciary, or someone who has an obligation to act in the best interests of the decedent.
Unfortunately, there are times when a fiduciary fails to fulfill this obligation. This is a breach of fiduciary duty, which can result in legal ramifications and penalties. Below are some examples of what a breach of fiduciary duty might look like and what you can do if you suspect a breach has occurred.
Backing up a little, understand that in the context of estate planning, a fiduciary typically has the following responsibilities:
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Valuing assets
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Securing assets
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Paying bills
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Filing tax returns
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Settling the estate
When carrying out these and other obligations, the fiduciary must act in the interest of the other party. Failure to do this is a breach. This could mean that a fiduciary has:
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Taken money without permission
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Kept information or property from beneficiaries
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Neglected the duties of this role
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Failed to manage assets
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Misused the position of fiduciary
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Refused to sell, pay or otherwise manage property responsibly
If a person breaches a fiduciary duty by engaging in these or similar behaviors, then legal action may be necessary. If it can be proven that a fiduciary breached his or her duty causing damages, then plaintiffs can collect damages by filing a legal claim.
However, it is important to understand that these types of legal claims can be far more complicated than you might expect, particularly if there are questions over whether a fiduciary relationship even existed in the first place. Because of the complexity of these claims, as well as how much could be at stake, it is critical that you consult an attorney familiar with estate planning laws if you believe your loved one’s estate has been mismanaged.