If someone names you as the executor of their will or the trustee of their trust, you become a fiduciary while serving in those capacities.
What this means, as the Legal Information Institute explains, is that everything you do as a deceased person’s executor or as the personal representative of his or her estate, you must do for the benefit of the heirs. The same holds true when you act as the trustee of a trust, only here you must work only for the benefit of the trust’s beneficiary or beneficiaries.
Breach of duty
No one expects perfection in the performance of your fiduciary duties. You are, after all, only human and therefore can make mistakes.. As long as you use your best efforts in the performance of your duties, no one can sue you if you make an inadvertent mistake or two somewhere along the way.
To successfully sue you for breach of fiduciary duty, the plaintiff must take you to court and prove that you deliberately harmed him or her, possibly by knowingly doing one of the following:
- Providing him or her with false, inadequate or misleading information
- Favoring another heir or beneficiary over him or her
- Decreasing the value of the estate or trust
- Acting in your own best interests rather than his or her best interests
If an heir or beneficiary successfully sues you for breach of your fiduciary duties, the court likely will enter judgment against you for the amount of financial harm, i.e., damages, you caused the plaintiff. If the court finds that your breach was actual fraud, it could also award the plaintiff punitive damages.