Breach Of Fiduciary Duty: Upholding Trust And Accountability
When you place your assets or the well-being of your loved ones in the hands of a trustee or personal representative, you expect them to act with the utmost integrity and responsibility. Unfortunately, this is not always the case. A breach of fiduciary duty occurs when a trustee or personal representative and fails to uphold their legal and ethical obligations, potentially causing significant harm to beneficiaries and the estate or trust.
Our attorneys at Reiter Law Firm, PLLC, have over 15 years of experience representing beneficiaries and interested parties in trust and estate litigation. We understand the complexities of fiduciary relationships and the devastating consequences that can result from a breach of trust. We provide skilled legal representation to clients in Sioux Falls and throughout South Dakota, holding fiduciaries accountable for their actions.
Understanding Fiduciary Duties
Trustees and personal representatives have a fiduciary duty to act in the best interests of the beneficiaries or heirs. This includes:
- Duty of loyalty: Placing the interests of the beneficiaries above their own.
- Duty of care: Managing assets prudently and responsibly.
- Duty of impartiality: Treating all beneficiaries fairly and impartially.
- Duty to account: Providing accurate and transparent accounting of all transactions and decisions.
These duties are an essential part of being a personal representative or a trustee. When these are not followed, it can mean that there has been a breach.
Common Breaches Of Fiduciary Duty
A breach of fiduciary duty can occur in various ways, including:
- Self-dealing: Using trust or estate assets for personal gain.
- Conflicts of interest: Engaging in transactions that benefit the fiduciary or their associates at the expense of the beneficiaries.
- Failure to disclose: Withholding important information from beneficiaries regarding the administration of the trust or estate.
- Mismanagement of assets: Failing to manage assets prudently, resulting in financial losses for the beneficiaries.
- Fraud: Intentionally deceiving or misrepresenting information to beneficiaries.
In addition to harming their relationships, when someone breaches their fiduciary duties, it can lead to serious consequences that often starts with seeking litigation support for the trust.
Consequences Of A Breach Of Fiduciary Duty
A breach of fiduciary duty can have serious consequences, including:
- Financial losses: Beneficiaries may suffer financial harm due to the fiduciary’s misconduct.
- Removal of the fiduciary: The court may remove the trustee or personal representative from their position.
- Surcharge: The fiduciary may be held personally liable for any losses caused by their breach of duty.
- Criminal charges: In cases of fraud or theft, the fiduciary may face criminal prosecution.
These consequences can help restore the damage a personal representative or trustee has done by acting improperly.
Questions We Hear Often About Breach Of Fiduciary Duty
Navigating the complexities of fiduciary litigation can often feel overwhelming. To help shed some light, we have compiled answers to some of the most frequently asked questions about breaches of fiduciary duty.
What is the standard of proof for breach of fiduciary duty?
In South Dakota, the standard of proof for breach of fiduciary duty is typically a “preponderance of the evidence.” This means it must be more likely than not that the fiduciary breached their duty.
What behaviors constitute a breach of fiduciary duty?
As discussed above, a breach can occur through self-dealing, conflicts of interest, failure to disclose, mismanagement of assets or fraud.
Who can be held liable for breach of fiduciary duty?
Trustees, personal representatives, powers of attorney, guardians, conservators, and anyone in a position of trust and responsibility over another person’s assets can be held liable for breach of fiduciary duty.
Protecting Your Interests From Fiduciary Breaches
If you suspect a trustee, personal representatives, or other fiduciary has breached their fiduciary duty, it is crucial to seek legal counsel immediately. Our attorneys at Reiter Law Firm, PLLC, in Sioux Falls have the experience and knowledge to protect your rights and pursue appropriate remedies. Call us at 605-800-8825 or contact us online. We are dedicated to upholding trust and accountability in fiduciary relationships.