How to Address Breach of Fiduciary Duty Claims
When a person passes away, their estate often goes through the probate process, during which a fiduciary, typically an executor, administrator, or trustee, is responsible for managing and distributing assets according to the deceased’s will or state law.
Fiduciaries owe legal duties to beneficiaries and other interested parties, and when they fail to uphold these duties, it can result in claims for breach of fiduciary duty. Addressing a breach of fiduciary duty in probate matters requires a deep understanding of probate law, fiduciary obligations, and the legal remedies available to beneficiaries.
That's where I come in. As an experienced probate attorney at Russell Manning Law PLLC in Corpus Christi, Texas, I'm here to help you work through the challenges of fiduciary responsibilities.
Here, I'll go over the elements of breach of fiduciary duty, common scenarios, legal remedies, and how a lawyer like myself can assist in resolving these disputes.
What Is Fiduciary Duty?
Firstly, a fiduciary is someone entrusted with managing another person’s assets or interests. In probate matters, fiduciaries include executors, administrators, trustees, and guardians. These individuals have legal obligations to act in the best interests of the estate and its beneficiaries. The primary fiduciary duties in Texas probate law include the following:
Duty of loyalty: The fiduciary must act in the best interest of the estate and its beneficiaries, avoiding self-dealing or conflicts of interest.
Duty of care: The fiduciary must handle estate assets prudently and competently.
Duty of full disclosure: The fiduciary must keep beneficiaries informed about the estate’s administration.
Duty of impartiality: The fiduciary must treat all beneficiaries fairly and not favor one over another.
Duty to follow instructions: The fiduciary must adhere to the terms of the will, trust, or applicable probate laws.
These duties are important to the parties involved. When these duties aren’t taken care of appropriately, it can lead to financial and relationship problems.
Common Breaches of Fiduciary Duty in Texas Probate
Secondly, breaches of fiduciary duty can take many forms. Some of the most common include:
Misappropriation of funds: Misappropriation of funds occurs when a fiduciary takes estate funds for personal use.
Self-dealing: Self-dealing involves engaging in transactions that benefit the fiduciary personally rather than the estate.
Failure to distribute assets: Failure to distribute assets means delaying or refusing to distribute assets to beneficiaries without legal justification.
Lack of transparency: Lack of transparency occurs when the fiduciary fails to provide beneficiaries with accountings or essential information about the estate.
Negligence in managing estate assets: Negligence in managing estate assets means making poor investment decisions or failing to protect estate property.
These common breaches can have detrimental effects if they aren’t taken seriously. As a Texas probate lawyer, I help my clients work through these issues.
Legal Remedies for Breach of Fiduciary Duty
Additionally, if a fiduciary breaches their duty, Texas law provides several legal remedies for beneficiaries. These legal remedies include the following:
Petition for removal: Beneficiaries can ask the probate court to remove the fiduciary for misconduct.
Accounting demand: Beneficiaries have the right to request a formal accounting of estate transactions.
Monetary damages: Courts may order the fiduciary to compensate beneficiaries for losses resulting from the breach.
Surcharge action: A fiduciary may be personally liable for losses due to their breach.
Injunctions: Courts can issue orders preventing the fiduciary from taking further harmful actions.
Criminal charges: In cases of fraud or theft, the fiduciary may face criminal penalties.
Texas-Specific Laws Governing Fiduciary Duties
The state of Texas has specific statutes and legal principles governing fiduciary duties in probate cases. Some of the most relevant laws are outlined below:
Texas Estates Code Chapter 351: This section outlines the responsibilities and potential liabilities of estate executors and administrators, according to Texas Public Law.
Texas Trust Code (Property Code Title 9): This code governs the obligations of trustees in handling trust assets.
Texas Probate Courts’ jurisdiction: Specialized probate courts in larger counties handle fiduciary breach cases, assuring experienced judicial oversight.
Statute of limitations: Under Texas law, a breach of fiduciary duty claim must generally be filed within four years from when the breach was discovered or reasonably should have been discovered.
Texas Uniform Fraudulent Transfer Act (TUFTA): This act protects beneficiaries against fraudulent asset transfers by fiduciaries.
Understanding these Texas-specific laws is crucial when bringing or defending against a breach of fiduciary duty claim. As a Texas probate lawyer, I’m ready to help you work through and address a breach of fiduciary duty in Corpus Christi.
How to Prove a Breach of Fiduciary Duty
To succeed in a claim for breach of fiduciary duty in Texas, the plaintiff (typically a beneficiary) must prove the following elements:
Existence of a fiduciary relationship: They must demonstrate that the defendant owed fiduciary duties to the plaintiff.
Breach of duty: They must prove that the fiduciary failed to act in accordance with their legal obligations.
Causation: They must show that the fiduciary’s breach directly caused harm to the estate or beneficiary.
Damages: They must establish that the breach resulted in financial or other types of harm.
By proving that there was a breach of fiduciary duty in the court of law, plaintiffs increase their chances of getting back what they may have lost.
How a Lawyer Addresses Fiduciary Breach Claims
When a fiduciary breach occurs, hiring an experienced probate attorney can be invaluable. Here’s how a probate attorney can help:
Evaluating the claim: A lawyer will assess whether a fiduciary’s actions constitute a breach of duty and advise beneficiaries on the likelihood of success in a claim.
Gathering evidence: Proving a breach often requires substantial documentation, including financial records, communications, and legal documents. An attorney can subpoena records, depose witnesses, and collect other crucial evidence.
Filing court petitions: If a fiduciary’s actions warrant legal intervention, a lawyer can file necessary petitions, such as requests for removal, accountings, or damage claims.
Negotiating settlements: Many fiduciary disputes are resolved outside of court through negotiations. An attorney can facilitate discussions to reach a fair resolution without lengthy litigation.
Representing clients in court: If a case proceeds to trial, having a knowledgeable probate attorney assures beneficiaries’ rights are properly defended.
A skilled probate attorney can provide the knowledge and support necessary to work through the challenges of fiduciary breach claims, making sure that beneficiaries' interests are protected and justice is served.
Preventing Fiduciary Breach Disputes
Preventing fiduciary disputes is often more cost-effective than litigation. Some ways to reduce the risk of breaches include:
Choosing the right fiduciary: Testators should appoint responsible, trustworthy individuals to manage their estates.
Clear estate planning documents: Wills and trusts should be drafted with clear instructions to minimize ambiguities.
Regular audits and oversight – Beneficiaries should request periodic accountings to make sure of proper estate management.
Mediation and alternative dispute resolution: If disputes arise, mediation can offer a less adversarial approach than litigation.
By taking proactive steps, the risk of fiduciary breach disputes can be significantly reduced. Consider reaching out to a probate attorney as your next step.
Contact a Probate Attorney Today
Breach of fiduciary duty claims in Texas probate law are serious matters that can lead to financial losses and prolonged legal battles. Consulting with me, Attorney Russell Manning, can make all the difference in protecting your rights and making sure the estate is properly administered.
My firm is proud to serve clients in Corpus Christi, South Texas, and the Coastal Bend area. Contact me today to schedule a consultation.