A fiduciary is an individual or institution that acts on behalf of another person. They must fulfill their fiduciary duty in good faith, with the intention of advocating the best interests of the person who appointed them. The owner of an estate will typically designate a fiduciary or personal representative to manage their estate when they die. They can choose an executor for their will or a trustee for their trust. The California probate court may appoint an estate administrator as a personal representative if the decedent dies without an estate plan.
Regardless of their estate planning instrument, the personal representative they appoint has a fiduciary duty to the owner. Therefore, when the estate owner dies, the personal representative has a duty to the estate and its beneficiaries and heirs. Personal representative breach their fiduciary duty when they go beyond their legal limitations and use their authority for personal interests.
Below are signs that a personal representative may have breached their fiduciary duty.
Inadequate record keeping
A personal representative has the responsibility to collate, and inventory the assets and liabilities of an estate. Furthermore, they must record any changes and transactions, including paying the estate’s outstanding debts and filing tax returns. When a designated beneficiary or the probate court asks for a report on finances, the personal representative should have it. Failure to adequately maintain records and documentation can result in financial loss. To begin with, you would not know the whereabouts of particular and potentially substantial assets and if the personal representative misappropriated them.
Assets have mysteriously disappeared
Let us say you are looking for the title of a property or a bank account, but you cannot find those assets. The personal representative should know their location. It is important to keep yourself updated with the accounting of the estate; otherwise, you might not be able to account for missing assets.
Commingling of assets
The personal representative should not merge their assets with the estate’s assets. You will have difficulty separating and identifying their assets from that of the estate. Any commingling of assets is suspicious fiduciary behavior.
Mismanagement
The personal representative is also in charge of maintaining the estate before distributing it to the beneficiaries. The estate should not be losing money too quickly or too often.
Favoritism
The personal representative should always be neutral and impartial when administering the estate. They should not overstep their authority and give one person more unless the decedent explicitly said so in their will or trust.
A personal representative should always put their duty first before their own gain. If you notice any of these shady signs, you should act fast and try to change the representative before they do any more damage to the estate.