Breaches of Fiduciary Duty in Estate Administration
Dec. 29, 2022
When a person passes away, their estate is typically administered by an executor or administrator. This individual is responsible for ensuring that the deceased’s wishes are honored and that the estate is distributed properly. As part of this role, they have certain fiduciary duties that they must adhere to.
Unfortunately, breaches of fiduciary duty in estate administration are not unheard of. If you believe that the estate administrator, executor, or trustee breached a fiduciary duty, consider speaking with an experienced attorney.
As an estate planning attorney at The Law Office of Mario Flores, PLLC, I help clients find the best resolution possible when dealing with a breach of fiduciary duty in estate and trust administration. From my office in Austin, Texas, I serve clients throughout the state, including in San Macros, Georgetown, and Round Rock.
Fiduciary Duty & Estate Administration
When administering an estate, an executor or administrator must act with good faith and loyalty to all parties involved. This means that they cannot engage in any activities that conflict with their duty as an executor or administrator. Their main responsibility is to ensure that the terms of the will are followed as closely as possible and that all assets are distributed according to the testator’s wishes. Additionally, they must respect the rights of all beneficiaries listed in the will and ensure that all taxes due on the estate are paid before any distributions take place.
What Is a Breach of Fiduciary Duty in Estate Administration?
A breach of fiduciary duty can occur when an executor or administrator does not follow through on their responsibilities or acts against their duty as an executor/administrator. Examples of this include failing to pay taxes owed on behalf of the estate, misappropriation or misuse of funds from the estate, self-dealing (using funds from the estate for personal gain), failing to properly value assets within the estate prior to distribution, and more.
What Is a Breach of Fiduciary Duty in Trust Administration?
There are many different examples of breaches of fiduciary duty in the administration of trusts. Common examples of breaches of fiduciary duty in trust administration include:
Mismanagement of trust assets or funds. A trustee may fail to properly manage the assets held in a trust for the benefit of another person (the “beneficiary”). This could include failing to make timely payments or investments and neglecting to make decisions in accordance with the terms of the trust agreement. The trustee may also commingle funds between trusts or use assets from one trust for personal gain.
Self-dealing. The trustee may also engage in self-dealing, which is when they put their own interests before those of the beneficiaries. This could include making decisions that financially benefit themselves while disregarding what is best for the beneficiary.
Failure to provide information. Another example is when trustees fail to provide beneficiaries with information about the trust or do not respond promptly when beneficiaries request information.
Failure to follow the trustor’s instructions. Trustees may fail to follow instructions provided by beneficiaries regarding how funds should be managed or invested.
Failure to keep accurate records. Trustees may fail to keep accurate records or fail to file necessary tax documents on behalf of beneficiaries.
All of these are examples of breaches of fiduciary duty that can lead to potential negative consequences for trustees who violate their duties and obligations.
Possible Resolutions When a Breach of Fiduciary Duty Occurs
If there has been a breach of fiduciary duty during estate administration in Texas, there are several legal steps available for resolution. Beneficiaries may file a lawsuit against the executor/administrator seeking damages for losses incurred due to the breach of fiduciary duty and/or seek removal from office if appropriate and necessary.
Additionally, beneficiaries may also seek an appointment by court order from a probate court judge if appropriate under applicable laws. Finally, beneficiaries may also file complaints with relevant state agencies, such as state bar associations, to investigate allegations further and take disciplinary action against offending individuals as needed.
Why You May Need the Assistance of an Attorney
It is essential for individuals serving as executors or administrators during an estate administration process to be aware of their fiduciary duties in order to avoid potential liability for breaching those duties. A breach can potentially cause significant financial losses to other parties involved in administering an estate, such as beneficiaries or creditors, so understanding what constitutes a breach is vital. That is why you may need the assistance of an estate planning attorney if you were appointed to serve as the executor or administrator of someone else’s estate.
Seeking the assistance of a skilled attorney is also crucial if you believe there has been a breach of fiduciary duty in estate administration. An experienced estate planning attorney will review the details of your case and inform you of your legal options, which may include filing lawsuits seeking damages for losses incurred or filing complaints with relevant state agencies.
Legal Guidance You Can Trust
Understanding your legal rights and options will help ensure the successful completion of estate administration without any unnecessary delays caused by any breaches that could lead to costly litigation. At The Law Office of Mario Flores, PLLC, I provide legal guidance to individuals who deal with breaches of fiduciary duty in estate and trust administration. Contact my office in Austin, Texas, to schedule a consultation and discuss your unique case.