As people develop their estate plans, they often provide fiduciary duties to someone they can trust. Fiduciary duty refers to someone who acts in the best interest of someone else, typically in a financial matter. While estate planners believe they can trust the person to oversee their finances, some people act selfishly. They may try to personally benefit from the position, and this becomes a breach of fiduciary duty.
The Michigan Legislature lays out precisely what breach of fiduciary duty entails. It is vital for loved ones to keep an eye out for the fiduciary actually following through on his or her duties. If any breach comes about, then it is paramount to act quickly. The estate planner may still be able to recover damages lost.
Determining fiduciary duty
The person in charge of someone else's finances in an estate plan is the fiduciary. To give someone this designation, a specific process needs to occur; a verbal contract is not enough. Therefore, the first step in determining a breach of duty is to make sure the person actually has the designation of "fiduciary." Legal action can still occur if someone steals money from someone else, but it does not qualify as a breach of fiduciary duty. Before designating anyone as a trustee or guardian, a contract should go into play detailing the confines of the relationship.
Determining a breach
The most contentious issue in any court case involves whether a breach actually occurred. A trustee may slowly drain a beneficiary's bank account without his or her knowledge. Bank records could provide evidence this actually happened and bolster the case.
Finally, the defendant must prove the breach resulted in damages to the plaintiff. Stealing money would certainly fall into this category. This allows the court to better understand how much the plaintiff should receive in damages.