A trust is a legal relationship between three parties: the trustor, which is the person who creates the trust, the trustee and the beneficiary. The trustee is responsible for managing the trust and acting in the beneficiary’s best interests. However, sometimes in Massachusetts, a trustee can breach their fiduciary duties, resulting in harm to the beneficiary and causing the latter to sue.
Breach of fiduciary duty
A trustee has a fiduciary duty to act in the beneficiary’s best interests, so the trustee must act with honesty, loyalty and prudence in managing the trust. If a trustee breaches their fiduciary duty by, for example, making investments that are not in the beneficiary’s best interests, misusing trust funds or failing to disclose important information, the beneficiary can sue the trustee for breach of fiduciary duty.
A trustee must avoid any conflicts of interest between their personal interests and those of the beneficiary. If a trustee engages in self-dealing, such as using trust funds to purchase property for themselves or their family, the beneficiary can sue the trustee through probate court.
The trustee is also responsible for managing the trust with reasonable care and diligence. When a trustee fails to exercise reasonable care and diligence that results in harm to the beneficiary, the beneficiary can sue the trustee for negligence.
Failure to distribute assets
A trustee must distribute the trust’s assets to the beneficiaries per the terms of the trust. If a trustee fails to distribute assets as required, the beneficiary can sue the trustee to compel them to distribute the assets.
Fraud is particularly harmful to beneficiaries and can result in an arduous legal battle. If a trustee engages in activity such as embezzlement, forgery or intentional misrepresentation, the beneficiary can sue the trustee for fraud.
Suing a trustee
The purpose of setting up a trust is to place your matters in the hands of someone you trust. A beneficiary can sue a trustee if the trustee breaches their fiduciary duty, causing harm to the former. If you are a beneficiary who believes that a trustee has harmed you in any way, pursuing restitution through the legal system can safeguard your rights.