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Breach of Fiduciary Duty

In the context of personal representatives (executors, administrators, guardians, and trustees), a fiduciary is an individual in whom another (the will-maker, trustor, court) has placed the utmost trust and confidence in to manage an estate or a trust.

Fiduciary is from Latin fiducia, meaning "trust," a fiduciary such as an executor, administrator or trustee has been given the authority and power by the court to act on behalf of the beneficiaries under circumstances which require the utmost level of trust. The fiduciary must act honestly, honorably, and in good faith and their actions must be completely transparent at all times.

The most common trustees include the trustee of a trust or the personal representative of a probated or administrated estate. Characteristically, the fiduciary has a higher level of knowledge and expertise about the matters being handled; for example, a trustee will often have knowledge about diversifying investments while the beneficiaries of a trust will not.

Fiduciary duty imposes an arguably stricter standard of behavior and a fiduciary has a duty not to be in a situation where his or her personal interests and fiduciary duty conflict. To further explain, a fiduciary should not have a conflict of interest, and this theory certainly applies to the management of estates and trusts. Some examples of a breach (break) in fiduciary duty include:

  • Acts, concealments, and intentional omissions meant to defraud or gain an advantage
  • Selling estate assets without court approval
  • Misappropriating assets
  • Improper accountings with gross errors or omissions
  • Using estate or trust assets for personal benefit
  • Financial negligence in handling estate or trust assets
  • Failure to file and pay required taxes
  • Failure to pay creditors' claims
  • Failure to conclude administration in a timely manner
  • Failure to follow the directions in the will or trust
  • Preferential treatment towards one beneficiary over another

If a beneficiary to an estate or a trust believes that a personal representative or a trustee has breached their fiduciary duty, they can bring the matter before the court. If the court determines that the fiduciary has failed in any one or more of their duties, the fiduciary can be held personally liable for any harm done to the estate or trust assets. The court can also order the removal of the executor, administrator or trustee.

To learn more about the personal representative's or trustee's legal obligations; please contact a Rossford probate attorney from Heban, Sommer & Murphree, LLC today!

Categories: Probate

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Heban, Sommer & Murphree, LLC - Rossford Estate Planning Attorney
200 Dixie Hwy
Rossford, OH 43460
Phone: (419) 662-3100
Website:
Probate.com

The information on this website is for general information purposes only. Nothing on this site should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute, an attorney-client relationship.

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