An inheritance left to you by a loved one can provide you with a financial lifeline and the long-term stability that you’ve hoped for. Yet, if your loved one left you part of their estate through a trust, you might feel a little uncomfortable with someone else, i.e., the trustee, managing those assets. After all, the trustee’s investment and asset distribution decisions can impact the value of the estate and your access to the resources that your loved one intended you to have.
Making matters worse is the fact that all too often, trustees fail to live up to their duties as a fiduciary. A fiduciary is someone who is tasked with putting someone else’s financial interests before their own. That sounds simple enough, but this duty is breached all of the time. If that happens to you, you might have to consider legal action to ensure that you’re protecting your interests.
How is the fiduciary duty breached?
There are multiple motivations that can drive a trustee to violate their fiduciary duty. Often, it’s sheer greed. Other times, it’s acting recklessly with the estate’s funds. In some cases, the trustee simply deposits estate assets into their own accounts, or they use trust assets to invest in their own business endeavors, which can create a significant conflict of interest. In other instances, the trustee simply pays themselves more than is warranted out of the trust’s funds or they otherwise embezzle money from the trust account.
How can you spot signs that the fiduciary duty has been breached?
If you suspect that the trustee who is overseeing the assets meant to be distributed to you is acting contrary to your and the estate’s best interests, you might want to keep your eyes open for potential signs that the fiduciary duty has been breached. This may include the following:
- Poor recordkeeping: You should be able to review the trust’s accounting records regularly. But if you find that those records are lacking in any way, that may be an indication that the trust’s assets are at least being mismanaged. At worst, the trustee has taken funds and is simply trying to cover their tracks.
- Missing assets: This might seem like an obvious red flag, but sometimes, a massive amount of money is taken from a trust account, piece by piece. This often flies under the radar. So, as you’re reviewing the trust’s financial documents, you need to make sure that every penny is accounted for.
- Lack of communication: If the trustee is dodging your calls and ignoring your requests to review documentation pertaining to the trust, you should be suspicious and start investigating the matter further.
What should you do if you suspect that the fiduciary duty has been breached?
If you’re concerned that trust assets are being mismanaged or stolen, you need to gather as much information as you can before you decide whether legal action is warranted. This may require legal action in and of itself, especially if the trustee is refusing to turn over the trust’s financial records.
But you need to be assertive in protecting your interests in these matters. If you’re not, you might be allowing the trustee to take what isn’t theirs, effectively stealing directly out of your pocket and the accounts that your loved one worked hard to build.
Don’t let that happen to you. Instead, think about reaching out to a legal professional to discuss the facts of your case so that you have a better sense of what your next steps should be.