Trustees are placed in charge of a trust to make sure it is cared for properly. If it isn’t cared for properly, it could be considered a breach of trust, which can have personal and legal repercussions. It is important for trustees and recipients of the trust to understand the obligations of the trustee as well as what can constitute a breach of trust to help prevent potential issues.
Key Duties for Trustees
Trustees have a number of key duties they must follow when they are in charge of a trust. If they do not follow through with these duties or act against the interest of the trust, the beneficiary can talk to a lawyer about challenging unfair trustee actions. Some of the key duties for trustees include the following.
- Duty of Loyalty – The trustee must act in the best interest of the beneficiaries at all times and avoid conflicts of interest.
- Duty of Care – Trustees must manage the assets with care and make careful investments to minimize potential losses.
- Duty to Act in Accordance with the Trust – It is crucial for the trustee to follow the terms and intentions of the trust at all times.
- Duty of Impartiality – All beneficiaries must be treated fairly at all times.
- Duty to Account and Inform – The trustee must keep clear records for the trust at all times and keep the trust assets separate from other assets.
A Breach of Trust
A breach of trust can cover numerous situations in which the trustee fails to fulfill their legal obligations with regard to the trust. A common breach of trust is when the trustee uses the trust funds for personal gain. Other examples include making bad investments, favoring one beneficiary over the other, or ignoring the instructions of the trust. All of these can be legal issues, and the beneficiary or beneficiaries can seek compensation through the court system for any losses that may be incurred.
Consequences of Breach of Trust
The trustee may face legal liability for the breach of trust, including being personally held liable for any losses. They may be required to pay restitution for funds that are lost, and beneficiaries are able to sue for compensation for any damages they sustain as a result of the breach. It is also possible for the trustee to be removed from the trust if the breach is serious and the beneficiaries would like someone else to act as trustee.
Preventing a Breach of Trust
Beneficiaries will want to make sure they work to prevent breaches if possible. They will want to check records carefully and make sure the trust is being followed. They’ll also want to make sure they’re in communication with the trustee and that they are kept updated on the state of the trust. If there are possible concerns, they’ll want to speak with a lawyer as soon as possible to prevent issues from getting worse.
If you have suffered because of a breach of trust, it is important to speak with a lawyer right away about your situation. If it rises to a legal issue, it may be possible to request compensation in court for the breach or to have someone else take over as a trustee. Talk to a lawyer today to learn more about your situation and what options you may have.
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