If you accepted the responsibility of being the executor of someone’s New Jersey estate or being the trustee of his or her trust, you are a fiduciary whether you realize it or not. What this means is that the person placed his or her trust in you and you therefore have a duty to appropriately manage the assets and distribute them to the person’s designated heirs and/or beneficiaries per his or her wishes.
Acting as a fiduciary is a serious undertaking, fraught with the potential for all kinds of mistakes, miscalculations, less than ideal decisions, and other actions or inactions on your part that could result in the heirs and/or beneficiaries suing you for breach of your fiduciary duty.
Defining breach
At its most basic level, a fiduciary breach occurs if and when you allegedly do one of the following:
- Act in a manner contrary to the interests of the heirs and/or beneficiaries
- Act in your own self-interest rather than in their interests
- Fail to disclose pertinent information to them
Elements of proof
To prevail in an action against you for breach of your fiduciary duty, the plaintiffs must prove all three of the following:
- That the will, trust or New Jersey law established not only your fiduciary relationship with the plaintiffs, but also your duties within this relationship
- That you somehow breached one or more of your duties
- That the plaintiffs suffered damages as a result of your breach
Recoverable damages
If the plaintiffs prevail in their breach of fiduciary duty suit against you, you face the possibility of being personally liable for paying them the amount of whatever economic losses they suffered because of your breach. In addition, if the jury determines that you deliberately defrauded the plaintiffs or acted with malice toward them, you could be personally liable for paying them punitive damages on top of their actual damages.
