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Most people expect an executor or trustee to manage an estate with honesty and care. After all, fiduciaries are legally required to act in the best interests of beneficiaries. But what happens when they don’t?
Whether you’re a beneficiary concerned about protecting your inheritance or a fiduciary wanting to stay on the right side of the law, understanding your rights and responsibilities is crucial.
If you’re dealing with an estate dispute in El Paso or Dallas-Fort Worth, knowing what qualifies as a breach of fiduciary duty can help you determine your next steps.
What Is Fiduciary Duty in Estate Planning?
Fiduciaries hold a position of trust, meaning they must act loyally, honestly, and in good faith when managing an estate or trust. In estate planning, the most common fiduciaries include:
- Executors – Oversee probate, pay debts, and distribute assets according to the will.
- Trustees – Manage trust assets for the benefit of beneficiaries.
- Agents under power of attorney – Handle financial or healthcare decisions for someone incapacitated.
These individuals have a legal duty to follow estate documents, act prudently when managing assets, and always put beneficiaries’ interests first. Failing to do so can lead to legal action.
Examples of Breach of Fiduciary Duty
Not every mistake is a breach of fiduciary duty, but when a fiduciary fails to act responsibly, beneficiaries may have legal grounds to challenge their actions. Common breaches include:
- Mismanaging assets – Making risky investments or neglecting financial responsibilities, causing the estate to lose value.
- Self-dealing – Using estate or trust assets for personal gain instead of for the beneficiaries.
- Failure to distribute assets – Delaying or refusing to distribute funds without a valid reason.
- Lack of transparency – Keeping beneficiaries in the dark or providing false financial information.
- Neglect – Failing to pay taxes, maintain property, or handle legal obligations properly.
Even if a fiduciary doesn’t act intentionally, negligence can still result in serious legal consequences.
What Happens If a Fiduciary Breaches Their Duty?
When fiduciaries violate their legal obligations, beneficiaries have options to hold them accountable. Possible legal actions include:
- Removing the fiduciary from their role.
- Filing a lawsuit to recover lost assets.
- Requesting a court order to force the fiduciary to take corrective action.
If you believe a fiduciary is acting improperly in El Paso, acting quickly is essential. Estate disputes in Texas can be complicated, and delaying action could make it harder to recover assets.
What Can Beneficiaries Do If They Suspect a Breach?
If you’re a beneficiary and suspect wrongdoing, start by gathering information. Review estate documents, request financial statements, and document any suspicious activity. If the fiduciary refuses to provide information or something doesn’t add up, it may be time to seek legal help. In some cases, disputes can be resolved through mediation. However, if the fiduciary refuses to cooperate, legal action may be necessary to protect your inheritance.
How Fiduciaries Can Protect Themselves
If you’re acting as a trustee or executor, staying organized and transparent is the best way to avoid disputes. Keep detailed records, provide regular updates to beneficiaries, and follow the terms of the estate plan carefully. If you’re unsure about your responsibilities, consulting with an estate attorney early can help you avoid costly mistakes. Being proactive can prevent misunderstandings and protect you from legal challenges.
Call an El Paso Estate Litigation Attorney
Estate disputes can get complicated fast. Whether you’re a beneficiary trying to protect your inheritance or a fiduciary facing allegations of wrongdoing, legal guidance is essential.
At the Law Office of Carey Thompson, we help clients in El Paso and Dallas-Fort Worth resolve fiduciary disputes efficiently and effectively. If you need advice on addressing a breach of fiduciary duty, call today to schedule a consultation.