Being the beneficiary of a trust can provide you with a certain amount of financial security. For most people who are in this position, these trust assets are about much more than money. After all, a loved one who is no longer here made the conscious decision to name them as a beneficiary. So, there’s a certain amount of care and love associated with a trust, too.
Know about fiduciary duty
This fact can make it all the more heartbreaking to find out that trust funds have been mismanaged. In some cases, trustees, or trust administrators, make bad investment decisions, squander trust assets, and sometimes even embezzle funds out of a trust. If you suspect any of these kinds of actions have been taken by your trustee, then it’s probably time to consider legal action.
The basics of fiduciary duty
This is because trustees are fiduciaries and must carry out their fiduciary duties faithfully. A fiduciary is someone who must put the interests of another ahead of their own. Therefore, when deciding how to invest or otherwise utilize trust funds, a trustee must do so in a way that he or she thinks is best for the beneficiary. Acting in any other way could be a breach of that Duty.
Signs of breach of fiduciary duty
There may be many indications that your trustee is breaching his or her fiduciary duties. Look for the following red flags:
- Incomplete or inaccurate records
- Favoritism towards one beneficiary over another
- Commingling of personal assets with trust assets
- Missing assets
- Conflicts of interest
- Questionable investment strategies
If you see any of these red flags, then you need to document everything, including your conversations with the trustee.
Breaches of the fiduciary duty need to be taken seriously. But these issues won’t resolve themselves. Instead, they require that you be proactive and bring these matters to light. You can only correct issues when you fight to have them heard. If this leaves you stressed, don’t worry. You have the ability to have a legal advocate by your side who can help you make the legal arguments necessary to aggressively present your position.