Archive for the ‘Trust Litigation’ Category

Breach of Trustee’s Fiduciary Duty in Mississippi

Sunday, August 17th, 2014

A fiduciary is either a person (such as the executor of an estate) or corporate entity (such as a bank), who has the authority and obligation to act for another through a relationship of trust and confidence. The trustee of a trust is considered a fiduciary due to the trustee’s duties and obligations to act in good faith and trust to the beneficiaries of a trust.  Fiduciary duties involve the obligations of the duty of loyalty and the duty of care, and breach of these duties can result in monetary and other liability.

The Duty of Loyalty

The duty of loyalty is clearly set out in the Mississippi Code under § 91-9-609.  This provision mandates the trustee invest and manage the trust assets solely in the interests of the beneficiaries.  All beneficiaries must be treated with the same loyalty.

The Duty of Care

The duty of care is scattered throughout the Mississippi Code’s Trusts and Trustees section.  In § 91-9-601-03, the Code sets out the prudent investor rule.  This rule requires the trustee invest and manage trust assets as a prudent investor would, by considering the terms, purposes, distribution requirements, and other circumstances of the trust.  The trustee must exercise reasonable care, skill, and caution.  All investment decisions should be analyzed in the context of the portfolio as a whole and the overall investment strategy.  The investor should consider:

  • General economic conditions
  • The possible effect of inflation and deflation
  • Tax consequences
  • The role that each investment plays within the overall trust portfolio
  • The expected total return
  • Other resources of the beneficiaries
  • Need for liquidity or income
  • An asset’s special relationship to the beneficiaries or purposes of the trust

            Generally, assets should be diversified unless the trustee determines the purpose of the trust is best served without diversifying.

Breach of Fiduciary Duty

Trustees control and manage often large portions of an individual’s money and property.  As such, they are in a position of great power.  Despite their well set out and stringent duties, trustees all too often mismanage, steal, or negligently fail to protect beneficiary’s assets.  Trusts aimed to benefit elderly, young, or incompetent family members are especially vulnerable to harmful trustee behavior.

Some possible grounds for breach of fiduciary duty by a trustee include:

  • Misappropriation or theft of trust funds
  • Negligence or incompetence in trust management
  • Fraud
  • Conflicts of interests or self-serving acts
  • Colluding with certain beneficiaries to the determinant of others
  • Allowing a co-trustee to commit a breach
  • Failure to account to beneficiaries or keep them informed
  • Co-mingling outside funds with trust funds

It may not always be evident that your trustee has breached his or her duty, especially when the trustee has failed to keep you up to date with the investment of your funds.  As such, it is important to consult with a trust litigation attorney as soon as you suspect unscrupulous trustee behavior.

Giddens Law Firm, P.A.: Trust Litigation Attorneys With the Experience to Achieve the Results You Desire

If you are a trust beneficiary and believe your trustee may have breached his or her fiduciary duties, the experienced Mississippi Trust Litigation Attorneys at Giddens Law Firm, P.A. can help. Trust law is complex and trust litigation requires the assistance of an attorney team with years of experience and exemplary trial skills.  At Giddens Law Firm, P.A., we have litigated countless trust cases and will use our knowledge of trust law to obtain the results you desire.  Call Giddens Law Firm, P.A. today at (601) 355-2022 to schedule your free consultation.

Giddens Law Firm Discusses QTIP Trust Cases in Mississippi

Monday, August 11th, 2014

Many lawyers set up trusts, at Giddens Law Firm we litigate trust cases.  If you are a beneficiary of a trust that is being administered by a bank, you should know that the bank has certain fiduciary duties and obligations to you as a beneficiary.  At Giddens Law Firm we have handled complex trust litigation against large corporate banks.  Often times, a beneficiary will place their trust in a trust officer.  It is a trust officer’s duty to be fair to all of the beneficiaries whether they are income beneficiaries or remainder beneficiaries.  Often times trust administration officers fail to adhere to the four corners of the trust document by giving preferential treatment to one beneficiary over the other.

An example of a trust which has multiple beneficiaries is a QTIP trust (Qualified Terminable Interest Property) (a QTIP trust is a type of trust that enables the grantor to provide for a surviving spouse and also to maintain control of how the trust’s assets are distributed once the surviving spouse has also died).

A QTIP trust will normally name a spouse as a beneficiary.  The trustee is required to pay at least annually all of the income derived from the trust.  The trustee should have in place policies and procedures and regular income sweeps ensuring the income beneficiary receives all of the income generated.  Often times a QTIP trust will have a provision such as a maintenance provision or a support provision which will allow the trustee, under certain limited circumstances, to invade the principle of the trust.  This type of activity has to be documented.  This is where many banks, trustees, financial institutions and fiduciaries run in to trouble.  If principle is sold and/or liquidated, it has a negative impact on the remainder beneficiaries.

If you feel you have questions regarding your status as a beneficiary and what your rights are as income or remainder beneficiaries under a QTIP or other trusts, you should contact an attorney.  At Giddens Law Firm, we understand trust law and we have the resources available to hold trustees accountable where they have failed in their duties.  We litigate trust issues.   Call today for a free consultation.