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
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!