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.
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.