Fiduciary Duty of Trustees

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What Is a Fiduciary Duty?

A fiduciary duty is a legal relationship between at least two parties. The "fiduciary" is the party the duty is imposed on. The "principal" is the party that is owed the duty.  Trustees have certain fiduciary duties when managing a trust. Since trustees are legal owners of the trust property, the trustee has a fiduciary duty to refrain from taking advantage of the legal ownership the trustee holds by using the trust property for his/her own benefit.

What Are a Trustee's Duties Toward a Beneficiary?

One of the most common examples of a fiduciary duty arises between trustees and beneficiaries. The trustee is the legal owner of the property of a trust. The beneficiary has no legal title to the property in the trust but may get use of the property without ownership.

The following are the fiduciary duties owed by a trustee:

Can I Recover Damages from a Breach of the Fiduciary Duty?

When a principle can show breach of the fiduciary duty, the benefit gained by the fiduciary should be returned to the principal. There are several remedies that can be imposed on a trustee upon breach of a fiduciary duty. Some of the remedies a court can impose on a trustee are:

Every state has a statute of limitation on when a beneficiary can file a breach of trust against the trustee.

Should I Consult an Attorney?

If you believe that a trustee who has legal title of trust property has been abusing his/her position as a trustee, you should strongly consider hiring an attorney who specializes in estate planning. Your attorney can help you gather evidence and take the necessary action against the trustee to ensure that the trustee does not further damage the assets of the estate.

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Last Modified: 07-11-2014 03:07 PM PDT

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