Fiduciary Misconduct

It’s an unfortunate reality that the fiduciary who has been appointed to represent your interests can drop the ball on their responsibilities, abuse their power or breach their duties. If you believe a fiduciary has committed misconduct, a case can be built and brought against them.

Let a Keystone attorney help you navigate your fiduciary misconduct matter and find the best remedy to address your concerns so you can feel confident that your interests are being protected.

  • Are you concerned your fiduciary has overreached by taking actions or making decisions that were beyond their authority?
  • Do you believe your fiduciary has a conflict of interest that affects their ability to place the interests of the beneficiaries above their own?
  • Do you have reason to suspect your fiduciary has manipulated paperwork or omitted information to conceal an error or evidence of their mishandling, misappropriation or misuse of assets?
  • Are you worried your spouse is using their position of confidence to take financial advantage of you?
  • Are you a fiduciary who believes you have been wrongfully accused of misconduct?

 

If you suspect fiduciary misconduct, it is crucial to act quickly to correct the problem, or the fiduciary could continue their problematic behavior and cause irreversible financial harm. Likewise, if you are a fiduciary who has been wrongfully accused of misconduct, it is important to retain counsel promptly to assist in your defense before the court issues any rulings adverse to your interests.  

 

Keep reading to learn more about Keystone’s fiduciary misconduct services. If you continue to have questions or concerns, we recommend that you schedule a free consultation with our team.

Definition

What Is Fiduciary Misconduct?

Fiduciaries are persons or entities that have been appointed to act on behalf of a person or persons. They have a duty to act in good faith and solely in the best interests of the persons they represent. Spouses also may be subject to the general rules governing fiduciaries on account of the confidential relationship they share with each other.

 

To enable them to effectively carry out their duties, fiduciaries generally are granted a great deal of power; however, with power comes the potential for abuse. The sad reality is that many fiduciaries improperly use their power for personal gain or other unethical reasons instead of using it to make decisions that benefit the persons they represent. When they breach their duties in this way, it is considered fiduciary misconduct.

 

Luckily, if fiduciary misconduct is discovered early, legal actions can be taken to reverse the damage the fiduciary caused. By working with Keystone’s skilled fiduciary misconduct attorneys, you can devise a strategy to achieve your litigation goals, which may include forcing the fiduciary to comply with your requests, removing and replacing the fiduciary and/or surcharging them for any damage they caused.

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What We Do

Why Do You Need a Fiduciary Misconduct Attorney?

When you discover that the person acting as your fiduciary has mishandled your assets, it can be distressing. The person entrusted to protect your interests and assets flouted their obligations and possibly even caused harm to your finances. 

 

While a realization such as this can be a hard pill to swallow, you don’t have the luxury of time when it comes to bringing a fiduciary misconduct claim. During the claims process, you will have to introduce evidence, such as financial documents, to support your allegation of misconduct. This can be difficult to do on your own; however, with the help of an attorney, the process can be streamlined.

On the other hand, if you are a fiduciary and believe you have been wrongfully accused of misconduct, it is also vital for you to retain a lawyer with experience in fiduciary misconduct cases to build a strong defense on your behalf, because losing could mean that you will be liable for paying damages and other costs relating to the misconduct out of your own pockets. It is also important to note that if you are a fiduciary with concerns that you might fail in your duties, overstep or inadvertently commit misconduct, Keystone can counsel you as you navigate your role to ensure you do not err in any way.

 

Regardless of which side of a fiduciary misconduct matter you are on, the team of attorneys at Keystone is ready to help secure for you the resolution you want.

Below are examples of the types of fiduciary misconduct cases Keystone handles:

Trustee or executor misconduct occurs when the fiduciary violates their duty of loyalty to beneficiaries/heirs by acting in bad faith and/or not placing their best interests first. 

 

Examples of trustee/executor misconduct include:

  • The trustee/executor is failing to provide beneficiaries/heirs with accountings.
  • The trustee/executor is commingling their personal assets with those of the trust/estate.
  • The trustee/executor is residing in trust/estate property without paying rent.
  • The trustee/executor is withholding or delaying distributions for no reason.
  • The trustee/executor is spending excessively and paying themselves an unusually high salary.

Power of attorney misconduct occurs when the person who has been appointed as a principal’s attorney-in-fact through a power of attorney document abuses their power.

 

Examples of power of attorney misconduct include:

  • The attorney-in-fact is making withdrawals from the principal’s bank accounts for their own use.
  • The attorney-in-fact is personally benefiting from investments they made using the principal’s finances.
  • The attorney-in-fact is mismanaging the principal’s assets, which has resulted in financial losses.
  • The attorney-in-fact is acting in a way that goes beyond the powers granted to them by the power of attorney document.

 

Conservator Misconduct: Conservator misconduct occurs when the person appointed to be the conservator of an incapacitated adult is not acting in their best interests and/or adequately protecting them.

 

Examples of conservator misconduct include:

  • The conservator is selling the conservatee’s property for personal gain.
  • The conservator is failing to secure the proper medical care for the conservatee.
  • The conservator is keeping the conservatee isolated from their family and friends.
  • The conservator is lying about the hours they spend managing the conservatee’s personal life and/or finances to receive more compensation.

Guardian misconduct occurs when the adult appointed to manage a minor’s personal needs and/or estate is failing to look out for the best interests of the child.

Examples of guardian misconduct include:

  • The guardian is using the child’s income to cover expenses not related to the child.
  • The guardian is failing to seek for the child the medical and/or mental health care they need.
  • The guardian is not allowing the child’s family to communicate or visit with the child, even the court has explicitly given them permission to do so.
  • The guardian is not providing the required accountings to interested parties.

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Spousal misconduct occurs when a spouse uses their position of confidence to act in bad faith and take advantage of their spouse.

Examples of spousal misconduct include:

  • The spouse is secretly transferring property to their family or friends to prevent that property from being classified as community property.
  • The spouse is selling real or personal marital property without the other spouse’s consent.
  • The spouse is hiding assets they acquired during marriage from their spouse.

The spouse is gifting community property without their spouse’s consent.

Who We Help

Who Our Fiduciary Misconduct Lawyers Represent

In the context of probate, fiduciary misconduct cases can involve everyone from beneficiaries and heirs, to executors and trustees, to conservators and guardians, to health care proxies and attorneys-in-fact. 

Regardless of which category you belong to, Keystone’s skilled team of attorneys is enthusiastic about serving you in your fiduciary misconduct matter. You can find some of the types of clients we represent in fiduciary misconduct cases below.

When a fiduciary is engaged in misconduct, beneficiaries’ and heirs’ inheritances are under threat. Keystone can help beneficiaries and heirs investigate their misconduct claim and bring litigation if necessary.

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In the event a successor trustee has a claim brought against them for fiduciary misconduct, Keystone can defend them to help protect them against liabilities. Our team can also help trustees bring a claim against a former fiduciary of the deceased settlor who caused harm to their trust.

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If an executor or administrator has been accused of fiduciary misconduct, Keystone can defend them and help protect them against liabilities. If there are concerns a prior fiduciary of the decedent financially exploited them, our firm can also help personal representatives bring a claim on behalf of the estate.

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In the event a conservator or guardian has breached their duties, Keystone can help the families of the victims bring litigation against the fiduciary who acted improperly. Keystone can also defend conservators and guardians who feel they have been wrongfully accused of misconduct.

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The authority attorneys-in-fact and health care proxies wield over the person they represent is governed by the specific terms of their contract. If there is evidence to show they defied these terms or abused their power, Keystone can help anyone with the authority to litigate on behalf of the principal bring a claim against the fiduciary. Our team can also defend attorneys-in-fact and health care proxies who have been wrongfully accused of misconduct.

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Our Work

Case Studies of Our Fiduciary Misconduct Services

Keystone’s knowledgeable team of misconduct lawyers is specialized in probate law and proud to offer a variety of fiduciary misconduct services. As demonstrated by the following case studies, we bring our unique expertise into every case we work on and are dedicated to helping you reach a favorable resolution to your matter.

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Court Removes Trustee Based on Financial Abuse

Keystone represented a client in her 70s who unknowingly created an irrevocable trust while overly medicated by her son. After being appointed trustee, the son proceeded to abuse his role by misappropriating trust assets for personal gain, essentially leaving his elderly mother broke. At the initial hearing, Keystone’s probate attorneys persuaded the court to immediately suspend the son as trustee and replace him with a private professional fiduciary to serve as interim trustee. Ultimately, Keystone proved that their client had been unduly influenced by her son to execute a new trust that favored him. As a result, the trust was invalidated and the client regained control of her assets. Read full case study

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Stolen Funds Recovered From Abusive Attorneys-in-Fact

Keystone’s client was the sister of a decedent. She came to the firm for help getting appointed as the administrator of his estate, which was valued at $50 million. Keystone was successful in obtaining for its client an appointment as administrator; however, further litigation would be needed, as the client found evidence to suggest her brother had been financially abused toward the end of his life by two pseudo-caregivers. The abusers had taken advantage of the decedent’s compromised mental state to steal valuables from his home and siphon money from his financial accounts using power of attorney documents. Ultimately, the Keystone tram was able to help the estate secure the return of more than $2 million in stolen money and property from the decedent’s abusers, as well as obtain a judgment for an additional $1 million. Read full case study.

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Financial Harm Caused to Trust by De Facto Trustee Reversed

Keystone’s client had been disinherited from his father and late mother’s trust through a series of trust amendments. This fact had come to light after the client noticed that the trust’s most valuable property had been encumbered by unnecessary loans. Once Keystone got involved in the matter, a clearer picture formed. While the client’s father was the official trustee of the trust, it was actually the client’s brother who was controlling the trust’s assets, i.e., he was acting as the de facto trustee. Not only had the brother unduly influenced the father to disinherit the client, but he was also using trust assets to fund his family’s lavish lifestyle. Ultimately, after demonstrating how the brother, as de facto trustee, harmed the trust, Keystone was able to have him removed and replaced with a private professional fiduciary. Additionally, the firm was able to have the amendments disinheriting its client invalidated, as well as secure for the client a settlement in which he became the free-and-clear owner of the trust’s most valuable real property. Read full case study.

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Conservator Exploits Elderly Mother for Greater Inheritance

Keystone’s clients had been disinherited from their grandmother’s trust after her estranged son levied false allegations of elder abuse against them and used those allegations to secure a temporary conservatorship over his mother. Three days before she died, the son took her to his own estate planning attorney to execute a new trust that disinherited her grandchildren and named him as the trust’s sole beneficiary. Keystone’s probate attorneys successfully argued that not only had the son’s elder abuse allegations been falsified, but that the decedent lacked the capacity to execute a new trust when she did, Ultimately, Keystone secured for its clients a favorable settlement in which they received the majority of the decedent’s assets. Read full case study.

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Decedent's Assets Recovered for Rightful Heir

Keystone’s client was the decedent’s closest living heir, which is why it seemed odd to him that the sole beneficiary of the decedent’s estate plan was the decedent’s caregiver and former financial adviser. He suspected that the caregiver had engaged in misconduct to make the decedent favor her in his estate plan. Upon investigating, Keystone learned that the caregiver had the decedent allegedly sign multiple estate planning documents when he ostensibly lacked the mental competence to do so. Ultimately, Keystone reached a favorable settlement for its client that allowed the client to recover a significant share of the decedent’s assets. (Read full case study.)

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Our Fiduciary Misconduct Firm

The Keystone team specializes in all types of probate law matters. Regardless of whether you are fiduciary seeking to defend yourself against a misconduct claim or you are being represented by a problematic fiduciary, our fiduciary attorneys are standing by to help you achieve your legal goals. 

 

We’re proud to help clients with fiduciary misconduct cases in California. We look forward to working with you.

Our Fiduciary Misconduct Lawyers

At Keystone, because our attorneys exclusively focus on probate law, they have a knowledge of the field that is unsurpassed and can consistently provide you with superior representation in your fiduciary misconduct cases. Members of our team have earned many accomplishments and accolades, including:

 

  • Opportunities to teach estates and trusts to law students
  • Invitations to speak on probate law topics for attorneys, CPAs and other professionals
  • Certification as Specialists in Estate Planning, Trust and Probate Law by the State Bar of California, Board of Legal Specialization
  • Awards from professional law publications, including Daily Journal, Best Lawyers® and Super Lawyers
Locations We Serve

We specialize in fiduciary misconduct matters across California, commonly serving:

 

  • Los Angeles County
  • Orange County
  • Riverside
  • Ventura
  • San Bernardino
Frequently Asked Questions

Fiduciary Misconduct FAQs

In this section, you can find answers to many of the questions we receive from our clients regarding fiduciary responsibilities and misconduct. If you have additional questions, please contact our team of probate attorneys for more information.

How do I know if fiduciary misconduct is taking place?

Fiduciary misconduct can be notoriously difficult to detect, especially if the fiduciary in question is not upholding their responsibility to communicate with you and/or provide you with accountings. In fact, a fiduciary’s failure to share information with interested parties can in itself be a red flag that misconduct might be taking place. 

 

Signs of fiduciary misconduct can include:

  • Fiduciary is withholding information or accountings
  • Fiduciary doesn’t appear to be placing your interests first
  • Fiduciary is commingling their personal assets with yours
  • Fiduciary is making unsound or risky investments
  • Fiduciary is misusing or misappropriating assets
  • Fiduciary is negligent

 

While the above list is not exhaustive, it can give you an idea of the types of red flags that warrant the involvement of fiduciary misconduct lawyer.

What should I do if my fiduciary is not communicating with me?

First, it is important to keep in mind that fiduciaries are generally only required to keep you reasonably informed about their actions. Of course, what the fiduciary finds reasonable may not be what you find reasonable, which is why conflicts can arise, At the end of the day, your fiduciary should provide you with enough information for you to enforce your rights.

 

It is a good idea to request information from your fiduciary in writing; this way, if you need to take the matter the court, you will have evidence to back up your misconduct claim. If, after multiple written requests, your fiduciary is still failing to communicate, it may be necessary to involve a lawyer. Sometimes, pressure from a lawyer may be all that is required to compel the fiduciary to comply with your requests, Other times, it may be necessary to sue the fiduciary for the information you want.

Is it considered misconduct if my fiduciary loses me money?

Not necessarily. When the fiduciary whom you’ve entrusted with managing your hard-earned money causes financial losses, it can be distressing; however, their actions would only constitute misconduct if the fiduciary acted in bad faith or against your best interests. 

 

Let’s suppose that you asked your fiduciary to invest your money in low-risk stocks, but then the stock market suddenly crashes, destabilizing stocks that have historically been stable. Would that be your fiduciary’s fault? Your fiduciary heeded your preferences, but circumstances out of their control caused your stock portfolio to plummet. In this instance, fiduciary misconduct likely did not occur.

 

Now, if the fiduciary acted negligently or against your best interests, which resulted in financial losses, then there may be reason to bring a fiduciary misconduct claim.

What is a fiduciary bond?

A fiduciary bond is akin to insurance for interested parties (e.g., beneficiaries, heirs, creditors, conservatees, wards). In the event the fiduciary breaches their duties intentionally or unintentionally, causing harm to the assets of the person or persons they represent, a fiduciary bond can help limit the damage caused by the fiduciary. 

 

In a probate action, whether a fiduciary needs a bond, as well as the amount of the bond, is generally determined by the court. 

Do I need my own lawyer if my fiduciary has a lawyer?

If your fiduciary has a lawyer, they likely hired that lawyer to protect their interests, not yours. In other words, the fiduciary retained a lawyer to guide them as they perform their duties to ensure no errors are made. 

 

When it comes to protecting your interests, that is your fiduciary’s job, so in an ideal world, you would not need a lawyer. That being said, many fiduciaries flout their duty of loyalty; therefore, it could be a good idea to have a lawyer on your team to not only monitor the fiduciary’s actions but also to protect your best interests in the event the fiduciary is going against them.

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Discuss Your Case with a Fiduciary Misconduct Attorney

If you are being represented by a fiduciary who you feel has acted in a way that goes against your best interests, or you are a fiduciary looking to protect yourself against liability in a misconduct case, you need a skilled attorney on your side. Having a lawyer with experience litigating fiduciary misconduct matters can be invaluable in bringing or defending a claim.  Speak to one of our attorneys as early as today by scheduling a free consultation.