Denver breach of fiduciary duty lawyer

Estate matters such as trusts, wills, and probate require a certain level of trust between the beneficiaries and those responsible for handling the estate. When those responsible fail to meet their legal obligations, beneficiaries may suffer a financial loss or other harm. Luckily, beneficiaries may have legal recourse when this happens.

Colorado Estate Matters, Ltd. helps those who find themselves in a position where a trustee or executor may have breached or violated their fiduciary duties. Because we represent either side – those who feel they’ve been wronged and those who are being accused – we have a more in-depth understanding of the nuances of Colorado probate law than other estate planning attorneys do.

Regardless of the side of the coin you’re on, we understand the delicate nature of these situations and will advocate for you and guide you through the process. Call (303) 713-9147 to schedule a free consultation today.

Table of Contents

What is a breach of fiduciary duty?

In simple terms, a fiduciary duty is a legal obligation owed by one person (the “fiduciary”) to another. It requires that the fiduciary acts with utmost good faith and loyalty towards the other person. A breach of fiduciary duty occurs when they fail to uphold this obligation.

Duty

When someone is appointed as a trustee or executor of an estate, they’re entrusted to carry out various tasks on behalf of the estate’s beneficiaries. These may include collecting and transferring assets, recording transactions, maintaining documents, and more.

Each of these tasks must be carried out honestly and in the best interests of the beneficiaries, not for their own personal gain — that’s their fiduciary duty.

The fiduciary duties of trustees and executors may include:

Duty of loyalty
Duty of impartiality
Duty of prudence and care
Duty to avoid conflicts of interest
Duty of disclosure
Duty to inform and account
Duty to separate trust property from personal property

The terms of a will or trust may also impose additional duties on trustees or executors. For example, it may require that the trustee invest trust assets in a certain type of investment.

Breach

Sometimes a breach involves an act of dishonesty or self-dealing such as embezzlement or misappropriation of funds. In other cases, a breach can occur simply from negligence or carelessness.

When it comes to allegations of a breach of fiduciary duty, intention matters less than the fact that a breach occurred.

There are several ways in which a fiduciary duty may be breached. In estate matters, a trustee or executor may breach their duties by:

Using trust funds or other assets for personal benefit
Failing to properly distribute estate or trust assets
Failing to accurately record estate or trust activities
Failing to respect the terms of the trust or will
Failing to provide beneficiaries with pertinent information or reports
Making improper investments or taking excessive risks with trust funds
Favoring certain beneficiaries over others
Operating with a third-party conflict of interest
Sharing confidential information without authorization
Losing track of funds or other assets
Commingling trust funds with personal funds
Failing to take any action to manage the trust or estate

This isn’t an exhaustive list, and other types of behavior may be considered a breach of fiduciary duty.

For example, the fiduciary may owe a duty outlined in the trust or will such as ensuring a beneficiary receives a certain item within a specified timeline. If the deadline isn’t met, this could be considered a breach.

Types of fiduciary duty relationships

It’s important to note that fiduciary duties aren’t limited to trustees and executors. Any individual with a responsibility to act in another party’s best interest may be considered to have a fiduciary duty.

Common relationships where fiduciary duty may apply include those between:

Trustees and the trust’s beneficiaries
Executors and the estate’s beneficiaries
Guardians and wards
Attorneys and clients
Real estate agents and clients
Financial advisors and clients
Principals and agents
Brokers and principals

The exact nature of a fiduciary duty depends on the type of relationship and may be outlined in relevant state laws or the terms of a will, trust, or other legally enforceable documents such as a contract.

Regardless of the relationship, all fiduciary relationships require trust and honesty. When these are breached, a claim for damages may be appropriate.

Elements of a breach of fiduciary duty claim

When fiduciary duties are breached, the beneficiary of an estate (the “plaintiff”) may have the right to recover damages from the fiduciary (the “defendant”) by filing a civil claim in court. A breach of fiduciary duty claim must include and prove four elements to be successful:

The defendant owed a fiduciary duty to the plaintiff
The defendant breached that duty
The plaintiff suffered damages
The plaintiff’s damages were the direct result of the defendant’s breach of their duty

If the plaintiff can provide evidence suggesting that all of the above elements have been met, then they may be entitled to a variety of remedies including compensatory damages.

These damages are intended to make the plaintiff “whole” again. They may include the amount required to restore the value of the trust to what it would’ve been had the breach not occurred, as well as interest and other expenses related to the dispute.

For example, if funds were misappropriated, those funds would be reimbursed, plus the plaintiff might be compensated for the growth or interest those funds would’ve earned and attorney’s fees.

Additionally, if the plaintiff can show that the defendant’s breach was malicious, fraudulent, or otherwise intentional, they may be awarded punitive damages. These are intended to punish the defendant and prevent similar behavior from occurring in the future.

How to avoid a breach of fiduciary duty

Not all breaches of fiduciary duty are intentional or malicious. Even if the trustee or executor acted with good intentions and simply misunderstood, miscalculated, or overlooked an important detail, they can still be liable for damages. That’s why it’s essential for those in a fiduciary role to be diligent and attentive at all times and to seek legal counsel when necessary.

To reduce the risk of a breach, trustees and executors should make sure they have a thorough understanding of the unique terms of the will or trust and that they adhere to them. They should also:

Stay up to date on relevant state laws
Document all estate or trust activities
Maintain accurate records
Ensure that all beneficiaries receive timely updates and reports

Above all else, trustees and executors must make decisions in the best interests of the beneficiaries they’re serving. When making any decisions, it’s essential to consider the impact on all beneficiaries, not just a few.

As a fiduciary, the best way to ensure that you understand your duties and that you’re acting appropriately is to consult with Denver-based Colorado Estate Matters.

Benefits of hiring a lawyer

While abiding by your fiduciary duties may sound simple enough, it’s often easier said than done. Wills and trusts contain complex language that can be difficult to interpret without a legal background. There are also many nuances to consider when managing an estate or trust, and details that may seem insignificant to an untrained eye can have significant consequences.

By hiring a lawyer, trustees and executors can receive invaluable insight into the best ways to manage an estate or trust. A lawyer can carefully explain the terms and obligations of a trust or will, giving the fiduciary a comprehensive understanding of their role and the duties they must fulfill.

Proactivity is key to preventing a breach of fiduciary duty. If a breach of that duty is alleged, a lawyer can help the fiduciary craft and present an effective defense. Depending on the circumstances, they might also be able to mitigate the damage or even avert a lawsuit altogether.

Beneficiaries should also consider hiring a lawyer to represent their interests if they suspect the fiduciary has violated their duties. A lawyer can evaluate the situation and determine if the trustee or executor has, indeed, breached their duty.

They can then help the beneficiary pursue legal action and help rebuild the estate to their benefit. By taking the case to the civil court system, the attorney may advocate for solutions such as the permanent removal of the fiduciary, an emergency limit on the fiduciary’s powers, court-ordered duties, or repayment of lost assets — all of which can provide immeasurable relief to wronged beneficiaries.

Let our Denver breach of fiduciary duty lawyer help you

Betrayal, negligence, and mismanagement can have devastating consequences in estate matters, and preventing a potential problem from spiraling out of control is paramount. If you’re a trustee, executor, or beneficiary in an estate matter and have concerns about a potential breach of fiduciary duty, we’re ready to start problem-solving with you.

Colorado Estate Matters offers comprehensive estate planning, probate, and estate administration services to individuals and families throughout the Denver area. This includes assisting with fiduciary duty matters and litigation.

Our extensive estate-related knowledge and practical experience mean we’re uniquely positioned to help protect your rights and interests. Whatever the circumstances, we’ll approach your situation with diligence, creativity, competence, and compassion to craft the best possible outcome.

To schedule a free consultation with our Denver wills and trusts contests attorney, call us at (303) 713-9147 or fill out our contact form today. We look forward to speaking with you soon.

What is probate in Colorado?

Probate in Colorado is the legal process by which a deceased person’s assets are distributed and their debts are paid under court supervision.

When is probate necessary in Colorado?

Probate is typically required when a person dies with assets solely in their name, and those assets exceed a certain value, or there’s any real estate. The threshold amount changes over time, so checking the current limits is essential.

How do I start the probate process in Colorado?

To initiate probate in Colorado, you need to determine if formal probate is required, and then file an Application or a Petition (as well as the necessary ancillary documents) with the appropriate court, depending on the circumstances.

What assets are subject to probate in Colorado?

Generally, assets that are solely owned by the deceased, such as real estate, bank accounts, and personal property, are subject to probate. Jointly owned assets with rights of survivorship, assets held in a trust, and assets with designated beneficiaries typically bypass probate.

How long does the probate process take in Colorado?

The duration of probate in Colorado can vary depending on the complexity of the estate and any disputes that may arise. Often it takes a year or more to complete.

What are the costs associated with probate in Colorado?

Probate costs in Colorado can include court fees, attorney fees, personal representative fees, and other administrative expenses. These costs can vary based on the size and complexity of the estate.

Can I avoid probate in Colorado?

Yes, there are strategies to avoid probate in Colorado, such as creating a revocable living trust, using beneficiary designations on assets like life insurance policies and retirement accounts, and jointly owning property with rights of survivorship.

What are the rights and responsibilities of a personal representative in Colorado?

The personal representative (executor or administrator) is responsible for managing the estate, paying certain debts and taxes, and distributing assets to beneficiaries in accordance with the law and the deceased person’s will (if one exists).

How are disputes handled in Colorado probate cases?

Disputes in Colorado probate cases can be resolved through mediation, negotiation, or litigation in court if necessary. Common disputes may involve the validity of the will, claims by creditors, or disagreements among beneficiaries.

Is estate tax a concern in Colorado probate?

Colorado does not have a state-level estate tax, but federal estate tax may apply to larger estates. It’s important to consider federal tax implications when dealing with an estate.