You may have heard the term “fiduciary duty” often used in relation to estate and trust administration, and probate. But what exactly is a fiduciary and what are their duties related to estates? When people pass away, they leave their assets under the care of an executor, trustee, or other agent to carry out their wishes according to their estate planning documents. This person is known as a fiduciary, and has an obligation to disburse the assets under their care to the appropriate beneficiaries. In some cases, the fiduciary may fail to meet their fiduciary obligations.
In this article, our fiduciary litigation attorneys at PJI Law, PLC, explain fiduciary duty, how to pursue damages against a fiduciary who breached their fiduciary duty, and how to defend your position as the fiduciary against a breach of duty claim.
What Is the Fiduciary Duty of a Trustee, Executor, or Agent?
When executing the will or administering the trust of someone who has passed away, the fiduciary must uphold specific duties, and holds certain authority over the assets. Fiduciary duty includes:
- Duty of care to act with no undue influence
- Duty of loyalty to act in the best interest of the beneficiary
- Duty of confidentiality
- Authority to access certain digital assets held by the decedent, settlor, or principal, not subject to a terms-of-service agreement
- Authority to access tangible assets
- Authority to request account information disclosure from a custodian to access or terminate digital accounts
Other instances of fiduciary duty include financial institutions protecting private wealth, guardians making decisions for a person under guardianship, or a company board of directors choosing a new business model that affects shareholders.
Possible breaches of fiduciary duties during estate administration include:
- Using entrusted assets for the fiduciary’s own benefit
- Failing to pay debts, taxes, and other rightful claims
- Not providing an accurate accounting of all assets held by the decedent
- Refusing or failing to follow the terms of the fiduciary documents for the decedent’s trust, will, or power of attorney
- Committing fraud by concealing or omitting information about the decedent’s assets
How to Pursue Damages from a Breach of Fiduciary Duty
You must generally prove four conditions to file a claim for breach of fiduciary duty against a trustee, executor, or agent, including that:
- You had a fiduciary relationship with the decedent
- The fiduciary failed to meet their obligations
- You have legal standing to file the claim and the breach impacted you
- You experienced harm due to the breach
You do not have to prove that the fiduciary intentionally breached their fiduciary responsibilities. You may file a claim against a fiduciary who had no ill intentions but failed to fulfill their obligations accordingly.
For help determining if you’re eligible to file a claim against a fiduciary, contact our experienced fiduciary litigation attorneys.
How to Defend Against a Breach of Fiduciary Duty Civil Suit
Your attorney on your fiduciary litigation team has several options to help you build a defense against a breach of fiduciary duty claim.
The first option is to challenge the validity of the claim. Experienced fiduciary litigation attorneys know how to review the terms of the will or trust to determine if you followed the instructions according to the decedent’s wishes. If so, your attorney can call for dismissal on those grounds.
Another common defense option is the laches defense, which can be a complex defense to build. Based on equitable estoppel, the laches defense is useful in cases where the plaintiff waited an inordinate period before filing the complaint. The essential parts of this defense are an inexplicable or inexcusable delay in filing and injury or prejudice against the defendant in waiting to file.
You may also wish to build a defense on ratification, defined as the plaintiff’s prior knowledge and approval of your actions in managing the decedent’s estate, then filing the claim after the fact.
Reasons to Hire an Experienced Fiduciary Litigation Attorney If You Are a Fiduciary or Beneficiary
There are many reasons to contact an experienced, knowledgeable fiduciary litigation attorney to review your case.
If you are a fiduciary who has:
- made a mistake and don’t know how to correct it
- been asked by a beneficiary for a trust accounting, proof of trust assets, or a trust balance
- been accused of wrongdoing, or aren’t sure how to handle a pushy or unreasonable beneficiary
If you are a beneficiary who has:
- doubts about a fiduciary’s objectivity, integrity, or expertise
- suspicions about improper influence by the fiduciary
- been refused the accounting you asked for from the fiduciary
- been ignored by the fiduciary who won’t answer your inquiries or other correspondence
These are just some of the situations in which our experienced Northern Virginia fiduciary litigation attorneys can defend you against a breach of fiduciary claim if you are the fiduciary, or assist you in filing a claim against a fiduciary if you are a beneficiary. Contact us to discuss the specifics of your situation to get the help and peace of mind you need.
Contact Our Fiduciary Litigation Team at PJI Law, PLC, in Northern Virginia
At PJI Law, PLC, we build lifelong relationships with our clients through regular communication and white-glove service. We protect Virginia individuals, families, and businesses with personalized, attentive, and dedicated service. Call us today at (703) 865-6100 or contact us online to schedule a consultation for fiduciary litigation claims or defense.
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The information in this blog post (“post”) is provided for general informational purposes only and may not reflect the current law in your jurisdiction. No information in this post should be construed as legal advice from the individual author or the law firm, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting based on any information included in or accessible through this post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country, or other appropriate licensing jurisdiction.