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For Estate Planning, Estate Administration And Disputes

What must you prove in a fiduciary breach case?

On Behalf of | Oct 10, 2019 | Firm News |

If you are an heir of someone’s New York estate, the estate administrator (the executor of the decedent’s will) is a fiduciary who must manage the estate in your best interests. The same holds true of the trustee of someone’s New York trust of which you are a beneficiary. 

FindLaw explains that as a fiduciary, the administrator/trustee must put your best interests and those of the other heirs or beneficiaries above his or her own interests. If (s)he fails to do so, you can sue him or her for breach of fiduciary duty. 

Fiduciary breach examples 

Keep in mind that the fiduciary need not carry out his or her duties perfectly. For instance, if (s)he inadvertently makes an investment of estate or trust assets that ultimately turns out to be a bad one, this does not constitute breach of duty. Rather, a fiduciary breach must be a deliberate act on his or her part that financially damages you and the other heirs or beneficiaries. 

In general, fiduciary breaches consist of one of the following: 

  • The fiduciary knowingly acts for his or her own benefit instead of for yours. 
  • (S)he knowingly gives you misleading, inadequate or false information. 
  • (S)he knowingly pursues a course of action that negatively impacts the estate or trust. 
  • (S)he favors one or more heirs or beneficiaries over the others. 

Proof of breach 

Should you sue the fiduciary for breach of his or her duties, you will need to prove all of the following: 

  • That, in the case of an estate administrator, the decedent’s will named him or her as executor; or, in the case of a trustee, that the trust document named him or her as trustee 
  • That the underlying legal document set forth his or her fiduciary duties 
  • That (s)he failed to perform these duties by knowingly doing something that negatively impacted the estate or trust or you and other heirs or beneficiaries 
  • That, as a result of his or her breach, you suffered damages; i.e., a compensable monetary loss 

Recoverable damages 

If you win your lawsuit, the court will require the fiduciary to recompense you and/or the estate or trust for the loss you sustained, probably including interest. Should the court find that the fiduciary’s breach was a particularly egregious one, you may also recover your attorney’s fees and costs of litigation, plus punitive damages. 

You should not interpret this information as legal advice, but it can help you understand what you must prove if you sue someone for breach of his or her fiduciary duty.