Abuse of trust is considered a breach of the fiduciary duties owed by the trustee of a will or estate. When an individual decides how to distribute his or her estate among one or more beneficiaries, he or she will typically name a trustee who will be responsible for carrying out those wishes. A trustee may be a person or an organization and, in fact, can be anyone specified by the deceased, from a family member or friend to a lawyer to a financial investment company.
Depending on the size of the estate and the complexity of the deceased’s instructions, acting as a trustee can involve coordinating with multiple beneficiaries and being entrusted with distributing millions of dollars. Whenever there is a lot of money and someone in a position of trust, there is a potential for abuse. When a person in a position of trust, like a trustee, abuses that trust, it can be devastating for all involved.
If the trustee does not perform its duties in a careful and loyal manner as instructed, the trustee has engaged in an abuse of trust and breached its fiduciary duties. Because a trustee is expected to make judgment calls at times regarding the best disposition of the estate, it can be difficult to determine if an abuse of trust has taken place. This is where it can be useful to consult with an experienced breach of fiduciary duty attorney as not all breaches are cut and dried.
Although many courts and attorneys describe the fiduciary duties that a trustee owes to the beneficiaries in different terms, these fiduciary duties can generally be distilled into three main categories:
- Duty of loyalty: requires a trustee to act solely in the interest of the beneficiaries.
- Duty of care: requires a trustee to manage the estate in accordance with the trust guidelines and in compliance with applicable law.
- Duty of impartiality: requires a trustee to treat all beneficiaries equally and prohibits favoring one beneficiary over the others.