When someone creates a trust, they place immense faith in the trustee they appoint. This person or institution is expected to manage and distribute the trust’s assets fairly, responsibly, and in accordance with the grantor’s wishes. But what happens when the trustee doesn’t live up to that standard?

A breach of fiduciary duty by a trustee is a serious matter—and one that can negatively impact beneficiaries both emotionally and financially. If you suspect that a trustee is mishandling the trust, acting in their own interest, or neglecting their responsibilities, there are steps you can take to protect your rights.

In this post, we’ll explore what fiduciary duty means, how trustees can breach that duty, the legal remedies available to beneficiaries, and how inheritance loans from Approved Inheritance Cash can help you stay afloat while pursuing justice.

What Is a Trustee’s Fiduciary Duty?

A fiduciary duty is a legal obligation to act in the best interest of another party. In the context of a trust, the trustee’s fiduciary duty is to the beneficiaries of the trust.

A trustee must:

• Act loyally and impartially toward all beneficiaries
• Avoid self-dealing or conflicts of interest
• Manage assets prudently and responsibly
• Keep accurate records and provide transparency
• Distribute assets according to the trust terms
• Communicate regularly with beneficiaries

When a trustee violates any of these duties, they may be liable for breach of fiduciary duty—and beneficiaries have the right to take legal action.

Common Ways Trustees Breach Their Fiduciary Duty

There are many ways a trustee can fall short of their legal responsibilities. Some breaches are intentional, while others may stem from negligence or a lack of experience.

1. Self-Dealing

A trustee may improperly use trust assets for their own benefit—for example, buying property from the trust at below-market value or hiring themselves (or their business) for paid services.

2. Favoritism

If a trustee favors one beneficiary over others, distributes funds unequally without reason, or delays distributions to punish or reward behavior, they may be violating their duty of impartiality.

3. Mismanagement of Assets

Failing to properly invest trust assets, allowing properties to fall into disrepair, or making risky financial decisions can all harm the value of the trust and its ability to support beneficiaries.

4. Lack of Communication

Trustees are required to provide timely updates and accountings. Refusing to share information, ignoring beneficiary requests, or hiding transactions are red flags.

5. Failure to Follow the Trust Terms

The trustee must follow the specific instructions in the trust. Any deviation—such as delaying distributions or changing how assets are divided—could be a breach.

What Are the Consequences of a Breach?

A trustee who breaches their fiduciary duty can face serious consequences:

• Court-ordered removal as trustee
• Financial penalties or repayment of losses
• Civil lawsuits for damages
• Personal liability if they acted with fraud or intent

Most importantly, the court can restore the trust to its original purpose and protect the interests of the beneficiaries.

What Can Beneficiaries Do if a Breach Occurs?

If you suspect a breach of fiduciary duty, it’s important to act quickly and follow the appropriate legal steps:

1. Document Your Concerns

Start keeping detailed records of the trustee’s actions, including any lack of communication, questionable decisions, or missing assets. Save emails, letters, and financial statements.

2. Request an Accounting

You have the right to request a formal accounting of all trust transactions. If the trustee refuses or provides incomplete records, this may strengthen your case.

3. Consult an Attorney

A probate or trust litigation attorney can help you evaluate the trustee’s actions and determine if a breach occurred. They can also guide you through the legal process of holding the trustee accountable.

4. File a Petition in Probate Court

If informal attempts to resolve the issue fail, you can file a legal petition in probate court to seek the trustee’s removal, demand repayment of lost assets, or request other remedies.

How Inheritance Loans Help During Trustee Disputes

Legal disputes with a trustee can take months—or even years—to resolve. During that time, you may not receive your rightful distributions, leaving you in financial limbo.

That’s where Approved Inheritance Cash can help. We offer inheritance loans (also called trust advances) to beneficiaries whose funds are delayed due to trustee misconduct or legal disputes.

Benefits of an Inheritance Loan:

• Get cash now instead of waiting for the court to act
• No credit check or income requirements
• No monthly payments
• Non-recourse loans—you only repay if and when you receive your inheritance

Whether you need money for legal fees, housing, medical expenses, or daily living, an inheritance loan gives you financial peace of mind while you hold the trustee accountable.

Real-Life Scenario: A Trustee’s Secret Dealings

Let’s say Kevin is a beneficiary of his aunt’s trust, along with his cousin, Amanda. His uncle, Tom, was named trustee. A few months after their aunt passed away, Kevin notices delays in communication and no updates on when the trust will be distributed.

Eventually, Kevin discovers that Tom has been renting out one of the trust’s properties and collecting rent payments without reporting them. He also used trust funds to pay off personal debts.

Kevin hires a trust litigation attorney and files a petition to remove Tom as trustee for breach of fiduciary duty. But the legal process is slow, and Kevin needs money for legal costs and living expenses.

He contacts Approved Inheritance Cash, and after reviewing the trust and the litigation documents, Kevin is approved for an inheritance loan. The loan helps him stay financially stable during the legal battle. A year later, Tom is removed, and a professional fiduciary distributes the trust as intended.

Key Takeaways

• Trustees have a legal duty to act in the best interest of beneficiaries.
• Breaches of fiduciary duty can include mismanagement, self-dealing, favoritism, and lack of communication.
• Beneficiaries can pursue legal action, including the removal of a trustee and recovery of lost assets.
• Legal disputes can delay distributions, but inheritance loans provide immediate access to your future funds.

Are You Dealing With a Problem Trustee? We Can Help.

If your inheritance is being delayed because of trustee misconduct or litigation, you don’t have to wait and suffer. At Approved Inheritance Cash, we provide fast, risk-free funding to help you through the toughest moments—so you can fight for what’s fair and take care of your financial needs now.

Call us now or apply online to learn more about inheritance loans and how we can help during trustee disputes.