Many people have heard of the term “fiduciary” but may not know what it actually means. Put simply, a fiduciary is an individual or business, such as an accountant, attorney or financial advisor who is in a position of trust in relation to another person. In the context of trusts and estates, fiduciaries can be personal representatives, trustees, conservators and even family members. When allegations of misconduct or fiduciary abuse arise, it is crucial to have the advice and counsel of experienced attorneys.
GM Law represents beneficiaries of trusts and estates and other victims of fiduciary abuse in and around Santa Barbara County and throughout the state of California. We have a proven track record of holding fiduciaries accountable for their actions and helping our clients recover mismanaged or lost assets.
What Is Fiduciary Duty?
A fiduciary in one who owes a duty to, and legally obligated to act on behalf of, a beneficiary. When a position of trust is entered into, it is illegal for a fiduciary to act in a manner that harms a beneficiary’s interests. In short, a fiduciary has three fundamental duties:
- Duty of Care – A fiduciary is required to use the utmost care in managing the interests and assets of a beneficiary
- Duty of Impartiality – A fiduciary cannot not favor one beneficiary over another and must treat all beneficiaries equally and with disinterest
- Duty of Loyalty – A fiduciary must act in the best interests of the beneficiaries
Fiduciary Fraud and Abuse
Although fiduciary fraud and abuse involves a breach of fiduciary duty, before a breach can be proven, a fiduciary relationship must first be shown to exist. A person who has been named the personal representative or trustee of an estate, for example, clearly meets the threshold of being a fiduciary. Similarly, attorneys and investment advisers are considered fiduciaries and have an obligation to act in the best interests of their clients.
In order to prove a breach of fiduciary duty, it is necessary to demonstrate misconduct by the fiduciary and that damages resulted from his or her actions. At times, fiduciary abuse can be undertaken willfully or with the intent to fraud, but a breach can also arise because of incompetence or negligence. In any event, fiduciary abuse may involve the mismanagement or misappropriation of financial assets, the improper transfer of real property, or other types of fraud.
Ultimately, uncovering these fraudulent activities and protecting the interest of beneficiaries requires the legal knowledge and skills of our experienced attorneys. The team at GM Law is well versed in the laws relative to fiduciary duty and have the investigative skills to detect and track fraudulent financial transactions. We have a proven track record of successfully pursuing litigation on behalf of beneficiaries of trusts and estates and other victims of fiduciary abuse.
Remedies for Breach of Fiduciary Duty
In the end, administrators of a trust, conservators, personal representatives, and other fiduciaries all have a high standard of care in administering assets on behalf of a beneficiary or beneficiaries. By failing meet these standards, fiduciaries can be held personally liable and may also face criminal charges.
Although each case is unique, a beneficiary of a trust or estate or other victim of fiduciary abuse may be entitled to compensation. The courts can also impose additional penalties such as (1) ordering the removal or replacement of a fiduciary, (2) requiring a fiduciary to pay punitive damages, (3) denying a fiduciary’s right to collect fees and (4) requiring a fiduciary to pay surcharges to a trust.
Why You Should Call GM Law
The experienced trust and estate fraud and probate litigation attorneys at GM Law have extensive experience helping beneficiaries obtain the assets to which they are entitled.
In situations where assets are improperly used, invested, or retained in violation of trust rules, we have the necessary skills and resources to pursue litigation and hold trustees accountable.
Additionally, there are may other types of relationships that involve fiduciary obligations, such as a bank’s or financial firm’s relationship to its clients. We are committed to stopping all forms of fiduciary misconduct and helping our clients recover lost assets and obtain justice. If you have been the victim of fiduciary fraud and abuse, call our office today in confidence or complete the contact form on our website.