Offering Specialized Legal Support for Fiduciary Issues
For many people, being named the executor of a will or the administrator of an estate is a serious challenge. They might not be ready to carry out the duties of a fiduciary and don’t receive special training. Yet, the law holds them personally liable for mistakes that hurt the value of the estate. If you’ve been named as an estate representative or trustee, we can provide the counsel you need to succeed in your important role. Our attorneys both act as fiduciaries and counsel clients on their fiduciary responsibilities. Our firm also represents beneficiaries who are frustrated with deficiencies in their fiduciary’s performance. Because of our dedication in this area of the law, we are a proud sponsor of the Professional Fiduciaries Association of California, an organization committed to maintaining high standards of ethics and practice.
Understanding the Duties of a Fiduciary
A fiduciary is any person who has a special duty to act with loyalty, good faith and care while managing assets for the benefit of another. Essentially, a fiduciary must operate on behalf of the beneficiary, rather than the fiduciary’s own interests. An important aspect of a fiduciary’s duty is transparency, especially when potential conflicts of interest exist. A fiduciary must avoid even the appearance that they are putting their own interests first.
We are a proud sponsor of the:
Professional Fiduciaries Association of California (P.F.A.C.)
an organization committed to maintaining high standards of ethics and practice, as well as connecting California fiduciaries with vital professional services.
What is a Breach of Fiduciary Duty?
Breach of fiduciary duty occurs when a trustee, executor or administrator fails to perform in good faith or at a competent level. The breach can result from negligence or deliberate impropriety. Common examples are:
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Mismanagement of trust funds
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Reckless investments that deplete trust assets
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Failing to follow the terms of the trust
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Unreasonably withholding benefits or refusing to offer an accounting
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Converting assets for the fiduciary’s own use
To prove breach of fiduciary duty, a plaintiff must demonstrate that the fiduciary breached their legal obligation to act in beneficiaries’ best interests and that the violation caused monetary losses.
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What are the damages of a breach of fiduciary duty?
Trustees who breach their fiduciary duty can be personally liable for losses that resulted from their misconduct or negligence. Under California law, these losses can be measured in three ways:
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Any loss or depreciation in value of the trust estate with interest.
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Any profit the trustee made through the breach of trust with interest.
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Any profit the trust estate would have earned, but for the breach of trust.
A trustee is not automatically liable simply because there are losses. At the very least, beneficiaries must prove a mistake that a competent fiduciary would not have made caused the losses. In particularly egregious cases of misconduct, a court can award punitive damages, also called exemplary damages, in addition to actual damages.
Common Fiduciary Issues:
Beneficiary Rights —
Don’t let executors and trustees exceed their authority in managing the generational wealth of your family. We'll fight for your rightful inheritance.
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Claims Against Trust Property —
You can count on us for sound guidance in matters related to Probate Code 850/859 Petitions.
Trustee Assignment & Support —
Often Trustees are appointed with no prior legal experience. The responsibility can be daunting and if not handled properly could result in breach of fiduciary duty and legal repercussions.
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Fiduciary Disputes —
In cases of contested accountings, our firm drafts cogent reports. Where appropriate, we litigate allegations of deficient fiduciary performance by the trustee.
Glossary of Essential Terms
Trust —
A trust is a legal entity created to hold specific assets for the person creating the document, or Grantor. Many people create revocable living trusts to hold assets while they're alive. These trusts then become irrevocable upon their death. The purpose for doing this is to avoid the time and expense of probate, as well as to provide instructions for the management of their assets in the event they become incapacitated.
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Trustee —
Though the trust is not an actual person, the assets placed into the trust must be managed by a designated individual, known as the trustee. The trust creator or grantor designates a trustee, who has a fiduciary duty to manage trust assets in the best interests of beneficiaries as outlined in the trust agreement and comply with applicable laws when overseeing and allocating trust assets for the benefit of the trust beneficiaries.
Beneficiary —
A beneficiary of trust is the individual or group of individuals for whom a trust is created. The trust creator or grantor designates beneficiaries who are to receive the assets of the trust as outlined in the trust documents.
Fiduciary —
A fiduciary is a person or organization that acts on behalf of another person or persons, putting their clients' interests ahead of their own, with a duty to preserve good faith and trust. Being a fiduciary thus requires being bound both legally and ethically to act in the other's best interests.