What Happens if You Breach Your Fiduciary Duty in a Florida Probate?
If you are named an executor of someone’s estate, or you are the trustee for someone’s trust, you have to obey something known as a fiduciary duty. This means you have a legal obligation to act in the best interest of the beneficiaries of the trust or will.
For example, to better understand this concept, a doctor would have a fiduciary duty toward his or her patients, and a company’s board of directors has a fiduciary duty towards its shareholders. Although it exists in different situations, the basic premise is the same. And, if you fail to honor that fiduciary duty, you could be facing severe legal consequences depending on the situation.
What is a Breach of Fiduciary Duty?
A breach of fiduciary duty is when you break your legal obligation by acting in a manner that benefits someone other than the beneficiary. In most cases, a breach of fiduciary duty is when a trustee or executor puts their own needs or interests before those of the beneficiaries.
When there is a confirmed breach of duty, the personal representative or trustee could be held personally liable for any monetary losses, or even attorney fees in the event there is litigation. If you are in a position where a trustee or personal representative breached their fiduciary duty towards you, you need a Pompano Beach estate litigation attorney to help.
Ways a Trustee or Personal Representative Can Breach Their Fiduciary Duty
There are two main ways a trustee might breach their fiduciary duty. The first way is known as self-dealing, wherein a trustee enriches his- or herself at the expense of the trust’s beneficiaries. The second is conflict of interest, which is when the trustee acts in ways that is contrary to the best interests of the beneficiaries.
Like the trustee in a trust, a personal representative may be managing numerous assets on behalf of the estate for an unspecified amount of time. They may need to sell some assets in order to make a proper distribution. This could mean selling a business, closing it, or even passing it along to a successor.
These types of decisions can wind up in the hands of a personal representative if the decedent didn’t plan properly. In situations such as these, a personal representative would have to maintain a fiduciary duty and avoid acting in bad faith. This means avoiding conflicts of interest and always engaging in fair dealing when it comes to the estate heirs’ interests.
What happens when the personal representative is also a beneficiary or heir? This is a rather common situation as most people name another family member or close friend to be their executor. It’s not uncommon for disputes to arise if the personal representative does something that benefits themselves as well as the beneficiaries. The question here becomes whether the personal representative acted in self-dealing or was their action in the best interest of all beneficiaries.
Contact a Pompano Beach Estate Litigation Attorney
Resolving disputes like self-dealing and conflicts of interest can be quite complex. You need the expertise of a skilled Pompano Beach estate & trust litigation lawyer. Contact Mark R. Manceri, P.A. today to schedule an initial consultation.