When you become the trustee of someone’s trust or the executor of his or her United Kingdom estate, you also become a fiduciary. What this means is that the grantor of the trust or the testator of the will trusted you enough to put you in a position of authority to carry out his or her wishes. In other words, you have a duty to the heirs or beneficiaries to do the best you can to manage and distribute the assets per the provisions of the trust or will.
As FindLaw explains, you have many fiduciary duties. Should you fail to perform them properly, the heirs or beneficiaries can sue you for breach of your fiduciary duty.
Breach versus mistake
The law does not require you to perform your duties perfectly. You are, after all, human, and human beings sometimes make mistakes. Any inadvertent mistake you make, such as putting the wrong figure on a financial report or making a less than wise investment decision, does not breach your fiduciary duty. Rather, a breach is something you do deliberately that is not in the best interests of the estate or trust or its heirs or beneficiaries. Common breaches include the following:
- Acting in your self-interests instead of the interests of the trust, estate and/or the heirs or beneficiaries thereof
- Failing to give the heirs or beneficiaries all pertinent information
- Deliberately acting in any manner that is contrary to their best interests
Proving a breach
Should one or more heirs or beneficiaries sue you for breach of your fiduciary duty, they must prove all of the following:
- That the grantor’s trust or the decedent’s will designated you as the trustee or executor
- That the trust document or will specified your duties
- That you breached one or more of those duties
- That because of your breach, the heirs or beneficiaries suffered economic damages
If the heirs or beneficiaries win their lawsuit, the court could require you to personally pay their damages. The judge or jury likewise could require you to pay punitive damages to the plaintiffs if they conclude that your breach constituted fraud or malice.
This is educational information and not intended to provide legal advice.
