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Defining 'Breach of Fiduciary Duty'

Nashville Blog 2015 November Defining 'Breach of Fiduciary Duty'
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Defining 'Breach of Fiduciary Duty'

Posted By David Whittaker, Attorney at Law || 4-Nov-2015

When it comes to wills, trusts, and probate, fiduciaries include executors or “personal representatives” and trustees. A fiduciary is someone who acts on behalf of another, and they are in a position of trust.

If you have been appointed as a personal representative of an estate or as a trustee, you have a “fiduciary duty” to act in the best interests of the beneficiaries of the estate.

When a fiduciary fails to act in the best interests of the heirs or beneficiaries, or when they engage in a conflict of interest or self-dealing, they are have said to have “breached” their fiduciary duties.

Breach of fiduciary duty is an umbrella term that can arise under many different situations. Generally, fiduciary relationships exist under the following circumstances:

  • One person acts for another;
  • One person has influence over another;
  • An individual places confidence in another person;
  • One person is dominant over another; and
  • Business intelligence, or knowledge of the facts can give the fiduciary an advantage over the other person.

Fiduciaries have numerous responsibilities, including the duty of: care, loyalty, the duty to account, the duty of confidentiality, the duty of full disclosure, the duty to act fairly, and the duty of good faith and fair dealing.

The duties of a trustee include the duty to manage the trust solely for the benefit of the beneficiaries, the duty to fully disclose the material facts, the duty to keep completely accurate accounts, and the duty to preserve the trust’s property.

As a personal representative or executor, the fiduciary duties are imposed by the probate court. Once a personal representative (executor) is appointed, he or she has a fiduciary relationship with the heirs of the estate. Meaning, the personal representative must administer the estate for the benefit of the heirs and the creditors of the estate.

Breaches of Fiduciary Duty in Nashville

Unfortunately, personal representatives have been known to “breach” their fiduciary duties. Such breaches have involved engaging in self-dealing, comingling estate funds with personal funds, engaging in conflicts of interest, and squandering estate assets to name a few.

In egregious cases, beneficiaries have taken personal representatives and trustees to court. If they are found liable, several things can happen, for example, the fiduciary can be removed from their duties and they can be held financially responsible for causing harm to the estate.

To learn more about breach of fiduciary duty and estate litigation, contact me, David Whittaker, Attorney at Law!

Categories: Probate, Probate Administration, Trusts, Breach of Fiduciary Duty

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David Whittaker, Attorney at Law

Call Today: (888) 492-4735

David Whittaker, Attorney at Law - Nashville Probate Attorney
1616 Westgate Circle, Suite 127, Brentwood, TN 37027 View Map
Call Today: (888) 492-4735
(615) 289-6284
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