How Do Courts Address Breach of Fiduciary Duty in Trust Litigation?

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Utah law states that an individual who has a fiduciary duty shall act in the best interests of the beneficiaries of the trust. A fiduciary – also called a trustee – must administer trust assets so they do not favor or exclude any beneficiaries.

However, there are times when beneficiaries feel a breach of fiduciary duty has occurred. When beneficiaries perceive that the fiduciary is acting in their own best interest, it often becomes necessary to take legal action.

If you are the beneficiary of a trust and feel the trustee has breached their duty, you need to hire an experienced trust litigation lawyer who can review the evidence and determine what legal options may be available.

What Are Some Examples of Breaching Fiduciary Duties?

There are several legal factors that a court will examine to determine if a breach of fiduciary duty has occurred. Some common examples of breach of fiduciary duty include:

  • Embezzlement on the part of the fiduciary.
  • Fraudulent acts committed by the fiduciary.
  • Improperly transferring assets from the trust to the fiduciary’s personal accounts or a member of their family without obtaining prior consent of the beneficiaries.
  • Removal of property or assets without the prior consent of trust beneficiaries.
  • Failing to make timely asset distributions that align with the terms of the trust.
  • Negligent investment of assets held by the trust.

However, courts will also demand evidence that backs up any claims that a breach of fiduciary duty has occurred. Therefore, if you have reason to believe that a trustee is acting in their own best interests, you must keep all evidence that could support your claim.

A knowledgeable estate litigation attorney can review any evidence you may have to determine if a breach of fiduciary has occurred and what steps you can take next.

How Do You Prove Breach of Fiduciary Duty?

Utah law stipulates that a plaintiff must prove four legal elements in their claim that a breach of fiduciary duty has occurred. These legal elements include:

  • The existence of fiduciary duty: The plaintiff must demonstrate that they were engaged in a legal relationship with the defendant, with the fiduciary obligated to act in their best interests.
  • The defendant breached their fiduciary duty: The defendant must have acted in a way that was contrary to the best interests of the beneficiaries, such as embezzling funds, poor investments, or not distributing assets promptly.
  • Causation: To prove causation, it must be demonstrated that the breach of fiduciary duty helped to produce damages, which would not have occurred had there not been a breach of duty.
  • Damages: Damages are considered the amount of money that will provide proper compensation to the plaintiff(s). The court will consider several determining factors when assessing damages, such as the amount of the loss of money or property, proceeds or profits, bodily harm, emotional distress, and any money or property unlawful for the defendant to keep.

Our experienced trust litigation lawyers can provide the solid legal representation you need to ensure your legal rights are protected and you receive the assets intended for you and other beneficiaries.

How Can the Court Assist Beneficiaries if There Has Been a Breach of Fiduciary Duty?

If the court determines there has been a breach of fiduciary duty, there are several legal actions it can take against the trustee. These legal actions include:

  • Compel the fiduciary to correct their actions by returning the property or repaying money to the beneficiaries.
  • Compel the fiduciary to perform any duties they have failed to complete, such as distributing assets.
  • Reduce or deny the compensation the fiduciary receives for their services.
  • Suspend or remove them from their fiduciary duties.

Under state law, a fiduciary may be removed by the court for several legal reasons. These legal reasons may include:

  • The fiduciary committed a breach of trust.
  • The fiduciary has been deemed unwilling, unfit, or unable to carry out their assigned duties, and as a result, their removal is in the best interest of the beneficiaries.
  • All qualified beneficiaries formally request the fiduciary be removed from their duties, and the court determines that doing so is in their best interest.
  • There has been a substantial change in circumstances that made it necessary to remove the fiduciary.

Why is it Essential to Hire an Attorney to Handle Trust Litigation Issues?

If you are a beneficiary having issues with the trustee not complying with their fiduciary duties, you must seek legal representation immediately. Trying to navigate the Utah legal system independently can be incredibly challenging and could result in precious time and resources being wasted.

Hiring a trust litigation lawyer with comprehensive experience handling breach of fiduciary duty cases may be in your best interest. Our law firm has a proven record of obtaining favorable results and will fight hard to protect your legal rights.

Our legal team recognizes that dealing with a trustee who has committed fraud or embezzlement or simply not performing their duties as intended is incredibly frustrating. However, our attorneys will fight to help you and other beneficiaries obtain the justice you deserve by advocating that the trustee be removed from their duties or they repay or return any assets they may have wrongfully taken from the trust.

If you have legal questions regarding what constitutes a breach of fiduciary duty or what can be done to stop the trustee from misappropriating funds or other assets, contact Fontenot Law, P.C. at 801-448-0156 and schedule a free no-obligation consultation to discuss your case.

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