Protecting Your Inheritance & Rights in NYC
When you entrust someone with significant responsibility over your assets or the assets of a loved one – whether it’s managing an estate, a Trust, or acting as a guardian – you are placing immense faith in their integrity. This person or entity is known as a fiduciary, and they are legally bound to act in your best interests. But what happens when they fail to act appropriately? This is where fiduciary misconduct comes in, a serious breach of fiduciary duty that can have devastating financial and emotional consequences.
Our experienced NYC Estate Litigation Attorneys regularly help individuals and families navigate the complex and often distressing landscape of fiduciary misconduct.
If you suspect an executor, trustee, or guardian has acted improperly, understanding your rights and options is the first step toward recovering your share.
Understanding the Role of a Fiduciary
A fiduciary holds a position of trust and responsibility. In the context of estate planning and elder law, common fiduciaries include:
- Executors: Appointed in a will to manage and distribute a deceased person’s estate.
- Trustees: Manage assets held within a trust for the benefit of designated beneficiaries.
- Guardians: Appointed by a court to make financial and/or personal decisions for an incapacitated adult or minor.
- Agents under a Power of Attorney: Authorized to act on behalf of another individual’s financial or medical affairs.
The core duty of a fiduciary is loyalty, care, and good faith. They must prioritize the interests of the beneficiaries above their own, act prudently, and avoid conflicts of interest.
What Constitutes Fiduciary Misconduct?
Fiduciary misconduct, also known as a breach of fiduciary duty, occurs when a fiduciary fails to uphold these legal and ethical obligations. It can manifest in various forms:
- Misappropriation of Assets: The theft or unauthorized use of estate or trust funds for the fiduciary’s personal benefit.
- Self-Dealing: The fiduciary engaging in transactions where their personal interests conflict with the interests of the beneficiaries, such as selling estate property to themselves at an undervalue.
- Failure to Account: Refusing or failing to provide transparent and regular financial reports (accountings) to beneficiaries.
- Negligence or Imprudence: Making careless financial decisions that result in a loss of value, such as failing to pay taxes or neglecting to sell a depreciating asset.
- Delay in Distribution: Unreasonably delaying the distribution of assets to beneficiaries without valid cause.
New York Case Examples of Fiduciary Misconduct
New York Surrogate’s Courts frequently adjudicate cases involving breaches of fiduciary duty, often resulting in significant penalties for the defaulting fiduciary. These cases illustrate the serious consequences of misconduct:
- Surcharge for Imprudent Sale: In one case, an executor was surcharged (personally ordered to repay the estate) for selling real property below fair market value after the property was immediately resold for nearly twice the original price. The court found the executor failed to use the diligence and prudence of an ordinary person in managing the estate’s affairs.
- Breach of Duty to Account: A fiduciary who fails to provide a timely and proper accounting can face serious consequences, including contempt of court and potential imprisonment for willful disregard of a court order.
- Co-Executor Misconduct: While co-executors are generally viewed as a single entity, a co-fiduciary can still be held liable for failing to prevent a breach of duties by their co-fiduciaries.
- Self-Dealing and Misappropriation: Courts regularly address actions like an executor transferring all estate assets to themselves contrary to the will or an executor selling estate assets to companies they control for unreasonably low prices.
Taking Legal Action Against a Fiduciary in New York
If you suspect fiduciary misconduct, it’s crucial to act swiftly. The primary remedies available in New York’s Surrogate’s Court include:
- Compelling an Accounting: Forcing the fiduciary to provide a detailed financial report.
- Removal of the Fiduciary: Petitioning the court to revoke their appointment and name a qualified replacement.
- Surcharge: Ordering the fiduciary to personally repay the estate for any losses or damages resulting from their breach.
- Injunction: Obtaining a court order to stop the fiduciary from taking further damaging actions.
FAQ: Fiduciary Misconduct in NYC
A: Fiduciary duty is a legal obligation for an individual (like an executor or trustee) to act with the highest standards of loyalty, care, and good faith in the best interests of the beneficiaries.
A: Common fiduciaries include executors, administrators, trustees, and guardians.
A: Common examples include stealing assets (misappropriation), self-dealing (benefiting personally from the estate), failing to provide financial reports, or making negligent investment choices that harm the estate.
A: A compulsory accounting is a legal action in New York’s Surrogate’s Court to compel a fiduciary to provide a detailed financial record of all transactions related to the estate or trust.
A: Surcharge is when a court orders the breaching fiduciary to personally reimburse the estate or trust for any losses or damages caused by their misconduct.
A: Yes. The court can remove a fiduciary if they are found to have wasted assets, acted dishonestly, improperly managed property, or neglected a court order.
A: Yes, various statutes of limitations apply. It is crucial to consult with an attorney as soon as you suspect wrongdoing to avoid missing crucial deadlines.
Why Choose RK Law PC for Fiduciary Misconduct Cases?
At RK Law PC, our attorneys have over 30 years of combined experience aggressively representing beneficiaries and heirs in Surrogate’s Court. We are committed to protecting your inheritance and recovering lost assets in an efficient and cost effective manner.
For more information, please contact NYC Probate Litigation, Guardianship, Probate, and Estate Planning attorney Regina Kiperman:
Phone: 917-261-4514
Fax: 929-556-2089
Email: rkiperman@rklawny.com
Or visit her at:
40 Wall Street
Suite 2508
New York, NY 10005
Visit Regina on LinkedIn
Visit Regina on Facebook
This page is made available by the lawyer for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this site you understand that there is no attorney client relationship between you and the lawyer. The post should not be used as a substitute for competent legal advice from a licensed professional attorney in your state. ATTORNEY ADVERTISING.