A breach in fiduciary duty would mean either the trustee has overstepped their authority and/or failed to act in the best interests of the beneficiaries. If there has been suspicious activity concerning the management of your trust, you may want to investigate the matter further. Below are signs your trustee may have breached their fiduciary duty.
Commingling of assets
The trustee should keep their personal assets separate from the assets of the trust. You may have difficulty determining where the trustee’s assets end and where the trust’s assets begin. They may be using the trust’s assets for their own benefit without the knowledge and consent of the beneficiaries.
Insufficient record keeping
A trustee must thoroughly account for all the trust’s income and expenses as well as the investment gains and losses. They must maintain clear and organized documentation of the transactions happening in the trust so they can file an annual fiduciary income tax return. Failure to document and produce complete records can lead to substantial financial loss. You would not be able to account for missing assets.
Missing assets
If you and the trustee cannot locate assets, the trustee may have intentionally misappropriated them. The trustee may have invested the assets and kept the profit. That is why you must be aware of all the transactions and pay close attention to the accounting.
Conflicting interests
There should not be any bias when it comes to managing the trust. Trustees must be impartial and consider what is best for all the beneficiaries. There should not be any favoritism. Similarly, they must use due prudence when investing assets from the trust.
Mismanaging the trust
Make sure the trustee is prudently managing the funds of the trust. If the trust loses significant funds too quickly, something might be amiss.
If you feel like you cannot trust your trustee or that the trustee is not qualified to manage your trust, the court can replace them for breaching their fiduciary duty.