Fiduciary Duty Litigation Attorneys

Fiduciary Duty Litigation Attorneys

Holding Trustees, Executors, and Conservators Accountable for Violations of Their Fiduciary Duties

Trustees, estate administrators, and estate conservators all have fiduciary duties to protect the assets over which they have authority. Violations of these duties can lead to sanctions from the probate court (up to, and including, removal from office). The California Probate Code provides remedies to beneficiaries or protectees whose trustees, estate administrators, and estate conservators impaired their financial rights through violations of fiduciary duty.

An attorney can help beneficiaries or protectees determine how best to protect their interests. The experienced Los Angeles probate litigation attorneys at Hackard Law serve all of California, including Sacramento, San Francisco, Alameda, and Santa Clara. The following explains how an attorney can protect beneficiaries and vulnerable persons from those who fail to properly perform fiduciary duties on their behalf.

What Is a Fiduciary Duty?

A fiduciary duty is a legal obligation imposed upon a person with authority over assets that do not belong to them. Corporate officers, for example, have fiduciary duties to manage and protect the assets of a business and its shareholders.

In probate court, many different roles can place a person in control of someone else's assets. Trustees, for example, manage the assets of a trust to maximize the financial benefit to those beneficiaries identified in the trust. Similarly, an estate conservator can manage the financial affairs of an incapacitated adult. Estate administrators settle the assets and liabilities of a deceased person for the benefit of any heirs. In all of these situations, the role comes with authority to manage assets that do not lawfully belong to the person managing them.

So what specific duties do fiduciaries owe? Some are clearly stated, in no uncertain terms. Section 16004 of the California Probate Code prohibits trustees from dealing with trust property for their own profit, for any purpose unconnected with the trust, or to take part in a transaction in which the trustee has an adverse interest to the beneficiaries. For example, a trustee who wants to sell his own home to the trust would create a conflict of interest. As trustee, he would want the lowest price possible for the property, but as the home seller, he would want the highest. The inability to reconcile these needs has led state lawmakers to determine that trustees cannot engage in this type of self-dealing.

Similarly, this Section also prohibits trustees from conducting business with beneficiaries during the existence of a trust. The presumption here is that the "side transaction" would make the trustee partial in the administration of the trust.

Section 16005 also prohibits trustees from administering more than one trust if the beneficiaries' interests are adverse to one another. (For example, Trust A is designed to save wildlife, while Trust B is devoted to developing property in protected wildlife areas, these two goals could come in irreconcilable conflict with one another.) All of these rules promote a trustee's duty to act in the best interest of the trust beneficiaries.

Guardians and conservators also have fiduciary duties. A guardian is appointed to manage the financial affairs of a minor child, while a conservator is appointed to manage those of an adult who is unable to do so. Both guardians and conservators must also act in the best interest of their protectees. Courts can find evidence of self-dealing, profiting at the expense of the protectee, or improper side transactions a breach of fiduciary duty.

How Violations of a Fiduciary Duty Can Harm All Other Involved Parties

One of the most egregious harms suffered as a result of breaches of fiduciary duty is the impact on those the fiduciary was obligated to serve. A grantor who creates a trust intends to make financial provisions for specified beneficiaries. A trustee's breach of fiduciary duty will not carry out these wishes. Similar problems arise with an estate administrator who profits by disregarding the wishes expressed in a last will and testament.

Worse still are the harms suffered by protectees in the care of a guardian or conservator. In those cases, the protected person is alive and vulnerable. The court has entrusted that person's finances to the conservator or guardian. Profiting at the expense of this vulnerable person is perhaps even more harmful than disregarding the wishes of a person who was able to express them through a will or trust.

And of course, beneficiaries and loved ones suffer real financial losses as the result of breaches of fiduciary duties. The Probate Code, therefore, also sets forth the costs for which protected people and heirs may hold responsible someone who breaches a fiduciary duty. These costs demonstrate the many different financial losses that can occur as a result of a breach of fiduciary duty. Section 2401.3 allows for the recovery of:

  • Any losses (including profits) or depreciation suffered as a result of the breach (including interest)
  • Any profit the guardian or conservator made as a result of the breach (including interest)

How a Probate Attorney Can Help Hold Trustees, Executors, and Guardians Accountable for Meeting Their Fiduciary Duties

Worse than the devastating financial losses of a breach of fiduciary duty are the effects on protected people, and on the beneficiaries to whom a person intended to bestow assets. An experienced probate attorney can help hold executors, trustees, guardians, and conservators accountable for breaches of their fiduciary duties. This both helps prevent further losses and protects either a protected person or the wishes of a person who formed a will or trust.

Experienced Probate Litigators to Provide Accountability

Violations of fiduciary duty can harm everyone involved in the probate process. Trust grantors, will executors, and beneficiaries alike can suffer losses when a trustee or executor fails to meet the fiduciary duties of the office. It is up to loved ones to hold fiduciaries responsible for meeting their legal obligations.

The experienced California probate litigators at Hackard Law can help beneficiaries protect their financial interests from the harm caused by a fiduciary violation. Our Los Angeles attorneys serve all of California, including Sacramento, San Francisco, Alameda, and Santa Clara. Call (916) 313-3030 from Santa Clara or (213) 357-5200 from Los Angeles (or from anywhere in California), or write to us online to schedule your free consultation with one of our experienced probate litigation attorneys.