Law Offices of Roshni T. Desai
Long-term Planning For Orange County

Are you breaching your fiduciary duty?

If you agreed to be the executor of someone’s California estate or the trustee for a trust someone set up, this makes you a fiduciary. FindLaw explains that as a fiduciary, you must act in the best interests of the estate or trust and its ultimate heirs or beneficiaries. You may not and must not act in your own interests.

Bear in mind that you are a human being, and human beings often make mistakes. Consequently, no one, not the heirs, beneficiaries, a court or the law itself, insists that you perform your fiduciary duties perfectly. For instance, should you inadvertently miscalculate something, or if what looked like a solid investment to make with the estate’s or trust’s assets turns out to underperform, no one will accuse you of breaching your fiduciary duty.

Common fiduciary breaches

To breach your fiduciary duty, you must deliberately do something that harms the heirs or beneficiaries. As examples, all of the following constitute breach of fiduciary duty:

  • You deliberately act for your own personal benefit rather than for the benefit of the heirs or beneficiaries.
  • You deliberately give the heirs or beneficiaries false, misleading or inadequate information.
  • You deliberately do something else that damages the heirs or beneficiaries.

Fiduciary breach proof

In order to prevail in a breach of fiduciary lawsuit, the plaintiff must present clear and convincing evidence as to the following four things:

  1. That the last will and testament of the testator or the trust instrument of the grantor named you as executor or trustee
  2. That the will or trust document set forth your fiduciary duties
  3. That you somehow breached those duties by deliberately acting contrary to them
  4. That the plaintiff suffered monetary damage as a result of your breach

Assuming the plaintiff can prove these four elements, the court likely will issue a judgment against you for the full amount of the plaintiff’s monetary damages, possibly with interest. It could, in addition, make you liable for punitive damages as well if it finds that what you did or failed to do as a fiduciary was particularly egregious.

This is general educational information and not intended to provide legal advice.

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