Five Warning Signs of Breach of Fiduciary Duties

October 15, 2015 Posted In Breach of Fiduciary Duty
by Colorado Estate Matters

Know the warning signs of breach of fiduciary duty so you know when to take action & hold negligent fiduciaries accountable, notes a Denver estate & probate attorney.

“Know the warning signs of breach of fiduciary duty so you know when to take action & hold negligent fiduciaries accountable,” notes an estate planning lawyer in Denver.

Fiduciaries, including personal representatives and the executors of wills, are bound to act with a certain level of care and prudence when it comes to administering a will or an estate following a death.

Unfortunately fiduciaries may not always advance the interests of an estate over their own interests, potentially causing them to breach their fiduciary duties and incur some personal liability.

For beneficiaries, understanding how and when fiduciaries can breach their duties can be integral to knowing when to take action and hold these people accountable. To this end, below are some of the more common indications of breach of fiduciary duties.

A Fiduciary May Have Breached His Duties If or When…

  1. Estate assets seem to have gone missing without a clear explanation – Fiduciaries are required to keep detailed, accurate and up-to-date records regarding an estate’s assets, including all real and liquid property held by that estate. So, if some of the assets of the estate seem to have disappeared and the fiduciary does not have a clear, reasonable explanation for what happened to these assets, start asking more questions and doing some further investigating.
  2. There is no clear accounting for the transactions of the estate – Just as fiduciaries are required to keep detailed records regarding an estate’s assets, they are also obligated to account for all funds coming into and being paid out from the estate. If no such records exist or if the fiduciary is failing to keep clear/accurate accounting records for the estate, again, the fiduciary may have breached his duties in administering and settling the estate.
  3. The estate assets have been comingled with the fiduciary’s personal assets – This is a big no-no, as all estate assets are to be kept distinct from fiduciary assets. When co-mingling occurs, take it as a sign that a fiduciary is not meeting the standards of care necessary in handling the estate.
  4. Certain beneficiaries are being favored over others – Fiduciaries are required to act impartially when dealing with beneficiaries. If they do not and they end up favoring certain beneficiaries over others, this again can constitute a breach of fiduciary duties.
  5. The fiduciary’s actions seem less than prudent for other reasons – Is the fiduciary making unsound investments with the assets of an estate? Or do his or her actions seem fishy or less than transparent/ethical/reasonable for some other reason? If so, it never hurts to look a little deeper into the situation, as you may discover that the fiduciary duties have been breached and knowing this is the first step to taking action and holding that person responsible for compromising your interests.

Contact a Denver Estate & Probate Attorney at Colorado Estate Matters, Ltd.

If you are a fiduciary who needs professional assistance or if you are a beneficiary who believes a fiduciary has breached his or her duty of care, contact an experienced Denver estate & probate attorney at Colorado Estate Matters, Ltd. by calling us at (303) 713-9147 or by emailing us using the contact form at the top of this page.

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