When Does a Mistake Become a Breach of Fiduciary Duty?

 Posted on November 11, 2024 in Estate Planning

Fiduciaries — people in charge of carrying out estate documents like trusts and wills — can make mistakes. Being the executor of a will or a trustee of a trust is a major responsibility. If the will or trust involves many assets or beneficiaries, it can become a very complex task that can involve a great deal of paperwork and naturally result in some mistakes.

But when do mistakes become a breach of fiduciary duty? A fiduciary duty means that executors and trustees have a responsibility to act in the best interests of the estate owners. Breaching that duty could cause significant financial losses to the beneficiaries and have major legal consequences.

Understanding what fiduciary duty is and how to recognize when it is breached is crucial if you are the beneficiary of a will or trust. For more details, consult a Texas estate planning attorney who has experience in fiduciary litigation.

What Is Fiduciary Duty?

Fiduciary duty is the responsibility to place someone else’s interests above your own. If you are charged with overseeing a will or a trust, then you have a fiduciary duty to the person who created it. This responsibility can be broken down into specific obligations, such as:

• Duty of care: When carrying out the orders of a will or trust, a fiduciary must make efforts to care for the wishes of the estate owner.

• Duty of loyalty: A fiduciary must remain loyal to the interests of the estate owner by placing them first.

• Duty of accounting: A fiduciary should keep accurate records and accounting to ensure the assets are distributed according to the wishes of their owner.

• Duty of impartiality: A fiduciary should remain impartial when distributing assets and not favor one beneficiary over another.

How Is a Breach of Fiduciary Duty Different Than a Mistake?

The main differences between a mistake and a breach of fiduciary duty are whether the fiduciary had intent to cause harm, whether he or she made the same mistake repeatedly, and whether he or she tried to correct the mistake.

If a fiduciary passes on investing trust funds in a lucrative venture, for example, it may be an error. However, if a fiduciary repeatedly invests assets in high-risk ventures without seeking expert advice and causes significant financial loss to the beneficiaries, it is likely a breach of fiduciary duty.

How Can I Prove a Fiduciary Duty Was Breached?

If you want to prove to a court that a fiduciary breached his or her duty, you need to show three things:

• You first must establish that the person had a fiduciary duty to the estate owner.

• Then, you must show the fiduciary violated that duty by failing to meet the standards above.

• Finally, you must demonstrate that the violation harmed the beneficiaries.

Contact a San Antonio, TX Probate Litigation Attorney

It is not always easy to tell the difference between a mistake and a breach of fiduciary duty, which is why you should consult a San Antonio, TX fiduciary breach litigation lawyer who can tell you how a court might view your situation. At The Law Office of Ryan C. Moe, PLLC, we will put our vast experience in estate planning law to work and provide you with personalized legal services. Speak with an excellent attorney by calling 210-861-6000 now.