You create a trust knowing that someone has to carry out the duties of the trust after you pass away. That individual has a fiduciary duty to you, your beneficiaries and the trust itself. You expect that individual to make good decisions and to engage in acts that grow the trust or dole it out fairly.
If a trustee does not work in the beneficiaries' best interests, it's said that the individual is in breach of his or her fiduciary duties. If a person breaches his or her duties, that individual could face a lawsuit from the parties affected by the breach.
What is fiduciary duty?
In layman's terms, fiduciary duty is the duty of a trustee to make decisions and to administer a trust in the interests of the beneficiary. For example, a trustee who has been trusted to invest for the beneficiary should invest carefully and take few risks, so the investments do end up benefiting the individual. If that same trustee invests everything into one risky stock and loses everything, then it can be argued that he or she did not work in the best interests of the beneficiary.
What is a trustee's duty to a beneficiary?
The trustee has a duty to administer the trust in a way that benefits the beneficiary. He or she needs to preserve the trust's property as much as possible and keep clear accounts of transactions that take place. If the person is instead an estate representative, then that individual needs to act fairly and fully disclose his or her actions to all beneficiaries of an estate. The representative has a duty to protect the estate and to benefit both the creditors of the estate and the heirs of the estate.
What can you do if your trustee or estate representative breached his or her fiduciary duties?
You can bring a lawsuit against the individual. Your attorney can help you prove that the trustee or representative had a duty to you, the beneficiary, that he or she breached that duty, and that you suffered financial loses as a result. If you can show all three factors clearly, the court has the potential to rule in your favor.