How Can an Estate Executor Defend Against a Breach of Fiduciary Duty Claim?

 Posted on November 07, 2024 in Business Law

Estate fiduciaries have a legal obligation to carry out the wishes specified in estate documents. An executor, for example, is responsible for implementing the instructions in a will. A trustee is charged with fulfilling the directives in a trust. Both of these fiduciaries must act in the best interests of the estate owner or principal, a legal obligation that is referred to as a fiduciary duty.

Sometimes, the beneficiaries of a will or a trust may accuse the executor or trustee of a breach of fiduciary duty. This is a serious allegation that can result in civil penalties, which is why you should seek representation from a Texas estate litigation attorney if you are facing such accusations.

What Does Fiduciary Duty Mean?

Fiduciary duty can be broken down into two main elements:

• Duty of loyalty: The fiduciary has a responsibility to stay true to the interests of the principal and not take actions that are self-serving or for self-gain.

• Duty of care: The fiduciary must exercise reasonable care in carrying out his or her duties and avoid negligence.

If a beneficiary feels a fiduciary has breached his or her duty, it can be grounds for legal action.

How Can a Breach of Fiduciary Duty Be Proven?

To prove a breach of fiduciary duty, a beneficiary must prove the following:

• Fiduciary duty: One party had a fiduciary duty toward the other.

• Breach of duty: The fiduciary violated that duty.

• Causation: The breach of duty caused harm to the beneficiary or had some gain for the fiduciary.

• Damages: That harm resulted in economic damages.

How Can I Defend Against a Breach of Fiduciary Claim?

If a beneficiary files a complaint against you for breaching your fiduciary duty, your estate lawyer may employ any of several defenses. For example:

• You acted in good faith. This means that at the time you took the action under dispute, you believed it was in the best interests of the principal and the beneficiaries.

• You consulted with financial experts who advised you to take the particular action. By showing you sought the advice of others, you can argue that you were not trying to serve your own interests.

• You were transparent and communicated with the beneficiaries while carrying out your duties. If you were in regular contact with the beneficiaries and provided frequent updates, it can show that you were conducting yourself in good faith. It can also be a strong defense if the beneficiaries did not oppose your actions.

Contact a Bexar County, TX Fiduciary Litigation Attorney

Any defense against a breach of fiduciary duty claim will require documentation and other forms of evidence if necessary. Give yourself the best legal representation by hiring Geoff Mayfield, Attorney at Law, who will help you gather the required evidence and litigate your defense in court. Schedule a free consultation with a Wilson County, TX estate planning lawyer today by calling 210-535-0870 now.