Probate, the legal process of sorting out someone’s estate after they die, is a time that requires careful attention. A key aspect of this process is the fiduciary duty held by those in charge of managing the deceased person’s assets.
There are many ways fiduciary breaches may happen during probate.
Failure in communication
One cause of fiduciary breaches during probate revolves around a lack of transparent communication. The executor, who has a major fiduciary responsibility, could fail to give clear updates to beneficiaries. When this happens, beneficiaries are in the dark, unable to gauge the appropriateness of decisions made in managing the deceased’s estate.
If one sibling is an executor and the others are not, this could lead to conflicts in some circumstances. In fact, only 51% of Americans taking a survey reported that they were very or completely satisfied with their sibling bond as adults, meaning almost half felt less satisfied. Disagreements and hurt feelings from long ago could lead to poor choices.
Conflict of interest issue
Conflicts of interest can create fiduciary breaches. Executors may find themselves torn between personal interests and the duty to fairly distribute assets. This dilemma can lead to decisions that prioritize the executor’s gain over the rightful beneficiaries.
Poor asset management
Probate fiduciaries need to manage the deceased’s assets the best they can. Breaches may occur when executors fail to uphold this responsibility. This could involve poor investment choices, insufficient due diligence or a failure to adapt to changing market conditions.
Negligence
Fiduciary breaches can happen during probate due to negligence and incompetence in estate administration. An unfit executor could fail to address certain legal requirements or have an overall lack of competence in fulfilling the role.
Understanding how fiduciary breaches happen is important for the integrity of the estate distribution process. Executors need to foster a climate of trust and reliability in the administration of estates.