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By: Scott Grossman on December 27th, 2023

Can I Sue a Family Member for Breach of Fiduciary Duty?

Proving Breach of Fiduciary Duty

In legal terms, a fiduciary duty is an obligation to act in another person’s best interests, typically a client or beneficiary. The fiduciary is expected to exercise loyalty, good faith, and honesty when managing the affairs or assets of the other party. However, disputes over fiduciary duties can arise in various situations, including within families. Suing a Family Member for Breaching a Fiduciary Duty can be tricky. Here at The Grossman Law Firm, we have been helping our clients for over twenty years, ensuring they get their rightful inheritance. 

Breach of Fiduciary Duty

Can I Sue a Family Member for Breach of Fiduciary Duty? A breach of fiduciary duty occurs when a person owes a fiduciary duty. Usually, a trustee to a beneficiary fails to fulfill that duty. This results in harm or financial loss to the affected party. This breach may involve actions or omissions against the fiduciary’s duty to act in the other person’s best interests. While violations of fiduciary duty are commonly associated with professionals like trustees, executives, or financial advisors, the same principles apply when dealing with family members.

When it comes to family relationships, fiduciary duties can arise in scenarios like:

  • Power of Attorney: If a family member has been granted power of attorney to handle financial or legal matters on behalf of another family member, they assume a fiduciary duty to act in the individual’s best interests.
  • Estate Administration: Family members entrusted with the responsibility of managing the affairs of a deceased loved one, such as an executor or administrator, have fiduciary obligations to distribute assets, pay debts, and act honestly.
  • Guardianship: When a family member is appointed as a legal guardian for a minor or incapacitated family member, they must act in the protected person’s best interests.
  • Partnerships or Joint Ventures: In business partnerships or joint ventures involving family members, fiduciary duties are owed to each other to ensure fair dealing and honest management of shared assets.

It is important to note that mere disagreements or familial disputes do not necessarily constitute a breach of fiduciary duty. Specific elements must be proven to establish a violation. 

Legal Action Against Family

Suing a family member for a breach of fiduciary duty can be profoundly distressing and sensitive. When considering legal action, evaluating the nature of the violation and its impact on your rights and interests is crucial. While taking legal measures against a family member may seem daunting, protecting your legal rights and holding the breaching party accountable is often necessary.

However, the decision to pursue legal action against a family member should not be taken lightly. It may strain or permanently damage family relationships, leading to emotional repercussions that could compound the stress of litigation.

When contemplating legal action, it is advisable to take the following steps:

  1. Evaluate the Breach: Assess the nature and extent of the breach of fiduciary duty. Gather evidence, documentation, and any relevant information that supports your claim.
  2. Consult an Attorney: Seek legal counsel from an attorney experienced in fiduciary duty matters. They can guide the strength of your case and help you understand the legal options available to pursue.
  3. Explore Mediation or Alternative Dispute Resolution: Depending on the circumstances, attempting mediation or other alternative dispute resolution may be beneficial before resorting to litigation, particularly when family relationships are involved.
  4. Consider the Financial Implications: Assess legal actions’ costs and potential outcomes. Depending on the circumstances, it may be economically impractical or unwise to pursue a case against a family member when the possible recovery is minimal.
  5. Weigh the Emotional Impact: Consider the emotional toll legal action can have on your relationship with the family member. Litigation can be a protracted and emotionally draining process.

Ultimately, the decision to sue a family member for breach of fiduciary duty is highly personal and dependent on the specific circumstances. It is crucial to carefully weigh the potential benefits and drawbacks before proceeding.

In conclusion, a breach of fiduciary duty can occur within a family setting. Legal action is possible to address such violations. When considering a lawsuit against a family member, it is essential to evaluate the breach carefully. You should seek legal counsel, explore alternative dispute resolution methods, consider financial implications, and gauge the emotional impact on family relationships. Always approach these matters sensitively and strive for a resolution that aligns with your best interests and overall well-being.

Consequences of Breaching a Fiduciary Duty

Further, when trustees breach their duties, they may face various consequences. This includes:

  1. Personal Liability: The trustee may be liable for any losses the trust beneficiaries suffer due to the breach. 
  2. Removal from Position: Beneficiaries may be able to have the trustee removed from their position and replaced with another trustee. 
  3. Monetary and Non-Monetary Damages: A breach of trust can lead to financial or non-monetary damages for the beneficiaries. 
  4. Legal Action: The trustee could face legal action, court expenses, and attorney fees. 

Some common examples of trustee breaches of duty include self-dealing, negligence, imprudent investments, and failure to distribute trust income. Trustees need to fulfill their responsibilities and act in the best interests of the beneficiaries to avoid these consequences. 

More on your Family Member Breaching their Trustee Duties 

Need more information on Trust Litigation? Or, to ensure they are following their trustee’s duties or even removing a trustee, check out our complete overview of California Trust Litigation, available on our website. If you have more questions about your rights as a Beneficiary and what you should know moving forward. 

If you are still having some trouble, have any more questions, or want to talk to someone about your case, please give us a call (888) 443-6590 or fill out our Get Help Now form below.