Handling the affairs of an estate comes with significant responsibilities. If you serve as a fiduciary or trustee of an estate in Texas, you must adhere to a specific set of legal and ethical obligations. Sometimes, beneficiaries may feel you are not fulfilling these duties correctly, resulting in accusations of fiduciary liability.
Fiduciary liability refers to the legal responsibility that fiduciaries or trustees have towards the beneficiaries of an estate. When accused of such liability, it means that beneficiaries believe you have not acted in the best interest of the estate or trust. Here is what you should do if you find yourself in this situation.
Understand your responsibilities
The responsibilities of a fiduciary include acting in the best interest of the estate, managing assets responsibly and following the terms of the trust or estate plan. Knowing your duties and rights can help you respond appropriately to accusations.
Review your actions
Have you acted prudently and impartially? Have you kept accurate records and accounted for all assets? Answering these questions honestly will help you assess whether you have fulfilled your duties correctly.
Communicate with the beneficiaries
Open communication can often resolve misunderstandings before they escalate into legal issues. Discuss the beneficiaries’ concerns, explain your decisions and actions and provide any documentation that can prove you have acted correctly.
If communication and negotiation do not resolve the issue, you might want to consider mediation. A neutral third party can help you and the beneficiaries come to an agreement and resolve any disputes.
Prepare for possible litigation
If you cannot resolve the dispute through communication, advice or mediation, the beneficiaries may decide to take the matter to court. In this case, you need to prepare to defend your actions and decisions.
Being accused of fiduciary liability can be stressful, but understanding what you can do about it will help you get through this challenge more easily.