Do you believe that you have grounds to pursue a claim against the trustee administering a loved one’s trust in Indiana? If you are a beneficiary and believe that the trustee has violated their fiduciary duty to you or other beneficiaries, you need to raise these concerns to an experienced Indiana trust litigation lawyer as soon as possible. They should have a firm knowledge about fiduciary duty and when it has been breached by a trustee. A trustee is responsible for managing the assets inside a trust for the benefit of those beneficiaries assigned to it. This means that the assets must be handled by the trustee in a manner that is dictated by the terms of the trust. In the event that a trustee fails in these responsibilities, this is known as breach of fiduciary duty. Note that the rules related to managing trusts in Indiana are found in the Indiana Trust Code- IN Code § 30-4-3-1.3.
Kinds of Breach of Fiduciary Duty
Breach of fiduciary duty claims can come about as a result of a number of different type of actions. For example, it is easiest to determine that the trustee has violated their breach of fiduciary duty when they have stolen money from the trust. However, in many other cases, the breach of duty may be extremely subtle and this makes it all the more important to use a Indiana trust litigation lawyer to gather all of the necessary evidence to determine whether or not such a situation has happened.
In some cases, breach of fiduciary duty may not even be done intentionally but this does not mitigate the trustee’s responsibility to uphold the highest ethics to the beneficiaries of the trust. The trustee can still be held accountable even if their actions were not malicious or intentional.
A trustee, for example, might fail to pay taxes, make bad investments with money in the trust or favor one beneficiary over another, and all of these could become the basis of a breach of fiduciary duty claim. There are three major issues that can indicate that a trustee has violated their fiduciary duty and all these can become the basis of trust litigation.
The first is known as conflict of interest. Since the trustee is responsible for doing what is best on behalf of the beneficiaries of the trust and the trust itself, they cannot show interest in one party’s needs more than another. This can be evidence that the trust has been mishandled when a trustee is involved in conflict of interest claims. The second type of situation involves co-mingling of assets. The trustee needs to treat the trust as a separate legal entity because it is a separate legal entity and it does not belong to the trustee. Instead the trustee has only been appointed to handle the assets inside the trust and to ensure that the trust is administered based on its terms.
The trustee should, therefore, keep their personal assets separate from the assets of the trust. Any signs that show that the trustee’s personal assets and the trust assets have been mixed is a very bad sign and may become the basis of your breach of fiduciary duty claim. The third and one of the most common aspects of a breach of fiduciary duty claim is incomplete records. A trustee has to keep considerate records showing any investments, transactions, money going out of a trust and money coming into the trust. When a beneficiary makes a reasonable request to see these records, and the trustee is unable to show it, this can be evidence of greater malfeasance.
Beneficiaries need to know that these are not the only signs of breach of fiduciary duty that could lead to trust litigation but they are the most common ones. Sometimes these can be ignored because the trustee is a family member or friend or because these are very hard to see. If you believe that a trustee has abused a trust, however, you need to consult with a knowledgeable trust litigation attorney serving Indiana as soon as possible to better understand some of the complex issues at play here and whether or not you need to come forward with a breach of fiduciary duty claim.