When a person is appointed as an estate administrator, executor or trustee, they take on significant legal and ethical responsibilities. Their primary duties are to 1) carry out the terms of the will or trust, 2) preserve the estate/trust assets, 3) ensure the settlement of taxes if owed, and 4) distribute assets to the vested beneficiaries.
Unfortunately, not all fiduciaries fulfill their responsibilities the way that they are expected. When they fail, their mistakes can lead to financial losses, broken family relationships – and legal battles.
What are the major “red flags” of fiduciary failure?
While anything that makes you suspicious should be something you take seriously, the major signs of trouble with an estate’s fiduciary include:
- Lack of transparency and communication
- Delayed distribution of assets in contradiction of will/trust terms
- Mismanagement of assets
- Conflicts of interest or self-dealing
- Unauthorized transactions
- Failure to pay estate debts and taxes
- Inaccurate or incomplete accounting
What can be done if you suspect mismanagement or deliberate wrongdoing?
If you’re the beneficiary of an estate and you suspect deliberate wrongdoing or mismanagement, you can pursue a contested accounting lawsuit. This is a legal action that, if successful, forces the fiduciary in question to provide a detailed financial report of all estate or trust transactions.
If discrepancies, missing funds or unauthorized transactions are discovered, the court may hold the fiduciary accountable for any damages. In general, you can file a contested accounting lawsuit when:
- The fiduciary refuses to provide an accounting despite requests.
- The provided accounting is incomplete, inaccurate, or misleading.
- There is evidence of financial mismanagement, embezzlement, or fraud.
- The fiduciary has breached their duty by acting in their own interest.
- The estate’s assets have significantly diminished without clear justification.
Fiduciaries play a crucial role in estate and trust administration, and their failure to act responsibly should have severe consequences. If wrongdoing is suspected, legal remedies such as a contested accounting lawsuit can help ensure accountability and protect the interests of rightful heirs and beneficiaries.
