In many situations involving a person’s estate, you may hear the term “fiduciary duty.” This is a duty that someone may have regarding another individual or a portion of their estate. Essentially, the fiduciary has a legal responsibility that they are supposed to uphold
For example, perhaps two parents made a trust and put money in it for their children. They then named a trustee. After the parents pass away, the trustee has a fiduciary duty. They are supposed to administer that trust and so they have the right to handle and distribute the assets in the trust in accordance with the directions that were provided. No one else has this duty, so they are not responsible for how the money is distributed and they are not even authorized to access the account.
Why could this be a problem?
This can create disputes when the fiduciary is accused of breaching this duty.
For example, say that the trustee begins to remove money from the account to use for their own purposes. They were supposed to use the money to benefit the children, perhaps by paying for college tuition or something of this nature. But they are breaching that duty by using the money for personal gain.
But it doesn’t necessarily have to be that drastic. If the beneficiary simply wanted a distribution from the trust and was denied when they felt that the reason for the distribution was valid, then they may claim that the trustee breached their fiduciary duty by refusing that distribution.
In other words, these situations can get to be very complex from a legal standpoint. It is important for those who are involved to understand exactly what steps they can take to find a resolution.
