Ask the Estate Dispute Attorney Experts
Question: My mother passed away a year ago. The executor however is taking his time in administering her estate. Even worse, my mom left me the family home that was worth $850k four months ago but its market value has since dropped over $100K. The executor also doesn’t communicate with the beneficiaries and has yet to produce a final accounting. What I can do to wind up probate and is the executor personally liable for my $100K loss?
Not Sure?
Solution: The law imposes a high standard of duties on your executor. Just like everyone who drives a car has an implied duty not to drive carelessly, your executor must likewise not administer your mother’s estate negligently. This means your executor must follow the probate protocols established by the court when proceedings began and must present a final accounting and estate distribution plan within the timeline set forth by the probate judge.
Fiduciary litigation often arises when executors lax in meeting probate proceeding deadlines or fail to perform reasonably when carrying out their legal duties that cause a loss or “waste” in estate assets.
If your Smith Law of Iowa probate litigator finds evidence that shows your executor intentionally or negligently breached his duty of loyalty to administer your estate on time, your advocate can motion the court to compel the executor to produce a final accounting and seek a court order to force a prompt distribution of your mother’s assets.
KEY TAKEAWAYS
Executors are fiduciaries that hold high legal duties.
Probate procedure protocol sets timelines for estate administration.
The courts may surcharge executors when they carelessly perform their implied fiduciary duties.
The courts may also surcharge the executor—hold him personally and financially liable for damages from his carelessness—if your estate dispute attorney can prove the executor’s breach of fiduciary duty has caused a loss to your estate that you would have enjoyed had no breach taken place.
Implied Fiduciary Relationships
Legal duties in law emerge when one party agrees to act in your best interests. In estate planning, the following relationships among parties will give rise to such fiduciary duty obligation:
- Executor—Heir/Beneficiary
- Trustee—Beneficiary
- Attorney—Testator/Beneficiary/Heir
- Agent—Principal
- Guardian—Beneficiary
Fiduciary Duties in Estate Planning
The law imposes absolute confidence and trust on fiduciaries to protect and manage the assets and property placed in their care and to always work in the best interests of the individuals they represent.
Duty of Care. Your fiduciary must manage or settle your estate with extreme care and treat your financial resources as if they were his or her own. This means he or she must make smart, prudent and prompt decisions when executing testamentary documents or managing your property in trust.
Duty of Loyalty. Fiduciaries must further make decisions in your best interest and never place you or the estate in a disadvantage by putting their interests over your own.
Duty of Good Faith. Your fiduciary must likewise continually perform in good faith—no engaging in probate fraud or undue influence that will harm you or the estate in any way.
Most Common Legal Issue Found in Fiduciary Litigation
Will and trust dispute challenges seeking remedy for breach of the fiduciary’s duty of loyalty is by far the most petitioned cause of action in Iowa fiduciary litigation.
Your fiduciary may disregard his or her duty of loyalty to you in several ways, but you will most likely seek counsel at the Smith Law Firm after discovering he or she gained personally at your expense.
A hijacking of your estate assets and property may likewise take place if your fiduciary uses his or her trust authority to make self-dealing business decisions.
A breach of loyalty is therefore a serious wrongdoing and most often subjects the fiduciary to both civil and criminal liability.
Let’s look at three common estate hijacking examples stemming from a breach of loyalty:
- Hijacking of Estate Assets
Fiduciary Frank holds Testator Tom’s estate in trust for Beneficiary Betty.
While working on Betty’s trust, Frank learns that GE stock will rise 50% overnight. Instead of disclosing the business news and opportunity to Betty, Frank uses the estate’s cash to buy 1000 shares of GE and returns the money the next day after keeping $40K in profit from the sale for himself.
Betty later discovers how Frank misappropriated entrusted assets to self-deal a business opportunity for his own benefit. The courts may therefore surcharge Frank $40K plus any special damages he caused Betty after breaching his duty of loyalty to her.
- Hijacking Business Opportunities
Agent Allen holds a power of attorney authority over Principal Pete’s estate.
Pete’s family entrusts Allen to prudently invest Pete’s money and real property for profit to the estate. While searching for investments for Pete’s financial portfolio, Allen learns of a home that’s selling for 50% below market.
Allen buys the real estate for himself, and he realizes an easy profit of $100K after reselling the property within a month.
Pete dies a year later, and his heirs uncover evidence of Allen’s breach of loyalty to Pete. The fiduciary thus may be personally liable to pay back the heirs for the loss to their estate.
- Hijacking Private Information
Attorney Alfred is trustee of Beneficiary Barbara’s estate.
Alfred one day learns Barbara stayed in a hotel with another man after examining her bank statement. Barbara is famous, so Alfred decides to divulge her confidential private information in secret to a gossip column for $10K.
Barbra later discovers her fiduciary’s breach of loyalty, and she contacts the Smith Law Firm to file a removal of trustee lawsuit with remedies seeking damages for disclosure of her private information to the public.
How to Win a Breach of Loyalty Lawsuit
Similar to most top-rated estate and trust dispute law firms, the probate litigators at Smith Law in Iowa has a team of estate lawyers and probate investigators ready to dig into your complex circumstances to find evidence that shows the following five breach of fiduciary duty elements took place:
- A fiduciary link existed between yourself and the wrongdoer.
- The relationship implied the fiduciary owed you a duty of loyalty.
- The fiduciary gained a personal benefit while serving on your behalf.
- The breach was proximately tied to a loss to your estate.
- Actual financial damages exist because of the loss.
Favorable judgments will remedy damages to assets or will provide you with restitution in equity to take back unjust enrichments gained by the fiduciary.
If the courts find your fiduciary harmed your estate intentionally, you may also recover nominal or punitive damages even if you suffered no actual injury or harm.
Experienced Fiduciary Litigation in Iowa
Complex scrutiny of the facts and circumstances in your breach of fiduciary duty controversy require the help of well-practiced, knowledgeable estate attorneys at the Smith Law Firm to investigate whether you hold a valid claim
We are the go-to probate litigators in Iowa for resolving fiduciary negligence lawsuits.