Being a trustee comes with enormous responsibilities. These individuals are responsible for administering the trust upon the grantor’s demise. This involves ensuring that the grantor’s wishes are executed per the provisions of the trust instrument.
To effectively execute their role, a trustee must put the interests of the trust as well as the beneficiaries first. This is known as a fiduciary duty. When a trustee breaches their fiduciary duty, the consequences can be devastating.
A trustee can breach fiduciary duty in a variety of ways. Sometimes, a trustee may flat-right steal funds from the trust. And at times, it can be subtle, without malicious intentions. Whatever the motivation, a breach of fiduciary duty is a big deal.
Proving a breach of fiduciary duty
First of all, it is important that the person alleging a breach of fiduciary duty has proof for their claims. Thus, if you are a beneficiary of a trust, and you believe the trustee has done something wrong, then it is up to you to present evidence to support your claim. That said, here are situations that may lead to a breach of fiduciary duty:
Are they commingling assets?
A trustee cannot mix up the trust’s assets with their own. If they do, it can be difficult to draw the line between two sets of assets. And this can amount to significant losses for either party. If you suspect that the trustee is commingling assets, you need to investigate the matter.
Are some assets missing?
Missing assets is a clear red flag that the trustee could be up to no good. If the trustee cannot trace or account for assets that should be administered by the trust, then there is a pretty good chance they did something they shouldn’t have done, like selling off the assets in question and keeping the proceeds.
Be ready to protect your rights
Most incidents of breach of fiduciary are settled out of court. However, if the matter proceeds to litigation, then you need to learn how New Jersey estate planning laws work to effectively safeguard your rights and interests.