fiduciary

What Are The Consequences Of A Fiduciary Breach?

When you create a trust, the trustee is also known as a fiduciary. This means he or she has the legal responsibility to career out the terms in the trust and to do what is best for the beneficiaries. If this does not happen, those beneficiaries might be able to file a breach of fiduciary duty lawsuit. fiduciary

Naming any person as a fiduciary in your estate plan, such as a trustee is an important consideration. You should always choose someone who is comfortable serving in this role, and someone who also understands all of the legal responsibilities associated with this position.

A claim of breach of fiduciary duty is one that could lead to lawsuits. Trustees and other fiduciaries have a legal responsibility to act in the best interests of the person they are handling assets for, such as a beneficiary.

An accusation of breach of fiduciary duty could hurt the reputation of a person or professional. If a breach of duty case gets to the level of going to court, there may be more serious consequences associated as well, such as indirect damages, legal costs and direct damages.

Furthermore, removal from service, loss of a license or industry discrediting can also affect the fiduciary in which a court ruling comes down. In all of these complex issues, a fiduciary may choose to reach out to an experienced and qualified trust administration attorney or probate lawyer to assist with this process. Avoiding claims of breach of fiduciary duty can be an important way to minimize legal and reputational consequences.

Talk to a New Hampshire or Maine estate planning lawyer about how to choose a trustee for your trust.

Common Will and Trust Provisions for Fiduciaries

When you create your will or a trust, you’ll be able to appoint who you choose in the most important role of fiduciary. For a will, this would be your executor or personal representative. For a trust, it would be your trustee.

You can also discuss with your attorney the possibility of using specific terms within the respective document to give your agents additional authority.

One of the great things about creating your own will or drafting a trust with the help of an attorney or is that you decide what belongs in it. So long as the plan is compliant with state laws you are eligible to craft individual provisions. That being said, there are several provisions that appear in the most common trusts and wills, including the power to:

  • Sell or exchange property
  • Retain assets
  • Continue business ventures
  • Satisfy and settle claims
  • Pay assessments or taxes
  • Prosecute, negotiate or defend claims
  • Allocate items of income
  • Borrow funds with or without security
  • Sub divide, repair, lease, improve or manage real estate
  • Make distributions to beneficiaries in cash or in kind

The laws that govern trust and estate administration are designed to ensure that the responsibility of trust provided through fiduciary rules are not violated. Furthermore, your trust or will documents might limit or broaden the authority given to a fiduciary. You’ll want to speak to a knowledgeable estate planning attorney if you intend to enhance or diminish their potential authority levels.

Working with a lawyer to create your trust or will is strongly recommended; there are many things to think about in that process and having a lawyer’s help is vital for supporting you as you answer those key questions. Our NH estate planning law firm is here to help you.