A fiduciary is a person or organization entrusted to act in the best interests on behalf of another. Legally and ethically, the fiduciary owes their client a duty of care by acting in ways that always put the client’s interests first. In estate planning, which is the focus of this article, a fiduciary duty exists between a beneficiary and an estate administrator or executor.
It means that they are supposed to act in the best interests of the beneficiaries. So what happens when the fiduciary abuses their position of trust and acts based on self-interest?
You have a right to sue
As the estate beneficiary, you can sue the executor or administrator of the estate if they act contrary to your best interests. Whether they acted knowingly or inadvertently, you can seek legal redress for their actions.
Such instances in which you may be able to pursue this course of legal action include:
- Failing to provide accounting details
- Mismanaging estate taxes
- Failing to pay taxes on the estate
- Endangering estate assets by making risky investments
Possible penalties for doing this include removal from their position as the administrator or executor and being ordered to pay monetary damages, court costs and attorney fees. In addition, fiduciaries who violate their duties may be ordered to pay compensatory damages intended to repay the beneficiary. On top of that, the court may also order punitive damages meant to punish the violator’s conduct.
Protect your rights as the beneficiary
Just because someone or an organization has been tasked with executing a will does not mean they can do whatever they wish with the estate assets. You have rights as a beneficiary, besides the ones the fiduciary duty owed to you. Therefore, it is essential to be on top of all financial matters regarding your estate and that you carefully review any actions taken by the person charged with administering it.