Fiduciaries are supposed to act in the best interest of the people they’re helping. In the case of trusts, the fiduciary is supposed to oversee the funds and fulfill the principal’s (the account’s originator’s) instructions and wishes regarding the funds they’re managing in a way that benefits the beneficiaries of the trust. Any violation of that duty constitutes a breach and can be subject to legal action with the help of experienced Dallas breach of fiduciary duty attorneys.
As a beneficiary, you need to know how to spot those violations so you can act quickly. These are a few common warning signs to watch for.
1. You Notice Missing Assets
It’s a good idea to keep an eye on the balance of the trust and any transactions that the trust makes. When the fiduciary is acting responsibly, all assets should be accounted for and easily tracked. But if things don’t add up or you notice that money is missing without reason, there’s likely a breach of fiduciary duty happening. The sooner you can bring this to the attention of an experienced attorney, the better.
2. There’s Clear Favoritism of One or More Beneficiaries
Fiduciaries are expected to act in the best interest of all beneficiaries of the trust without bias. If they show favoritism to one or more of the beneficiaries, they’re breaching their duty. So, what might that favoritism look like? It could be investing in one beneficiary’s business or hiring another for a role that they’re not suited for or is associated with the trust. If you notice anything that looks like favoritism, it’s time to start investigating.
3. The Trust’s Value Is Diminishing Rapidly
Fiduciaries are expected to manage the trust’s assets in a way that doesn’t pose undue risk to the beneficiaries. If they’re blowing through the money quickly and causing the balance of the assets to drop, they’ve likely breached their duty. Start asking about the investments they’re making and where the funds are going and reach out to an attorney if you’re concerned.
4. The Fiduciary Acts Against Instructions
Though not all fiduciary relationships allow the principal to give instructions, some do. To maintain fiduciary duty, the fiduciary must follow the instructions they’re given by the principal. Any deviation or outright refusal to follow those instructions can qualify as a breach of fiduciary duty.
Keep in mind that just questioning the principal’s instructions likely won’t constitute a breach. It’s the fiduciary’s responsibility to act in the best interest of the principal and any beneficiaries. If they believe the instructions will negatively impact the beneficiaries and principal in some way, they have the right and the duty to let the principal know.
Have You Experienced a Breach of Fiduciary Duty?
As a beneficiary, figuring out if you’re experiencing a breach of fiduciary duty is key if you want to preserve the assets for yourself and the other beneficiaries of the trust. If you notice any of these signs or just have doubts about the fiduciary’s responsibility and honesty, don’t ignore them. Schedule a free consultation with the experienced Dallas breach of fiduciary duty attorneys at Norris and Weber. Our team will help you determine if your fiduciary is acting in good stead or if they’re violating their responsibilities.