Fiduciary Responsibility | Beneficiary Distributions

I’ll start with a disclaimer. We represent beneficiaries who have been abused by banks, trust companies and professional fiduciaries.

My take on fiduciary wrongdoing is colored by a lot of experience in civilly prosecuting trust wrongdoers. It’s that simple.

I don’t see the cases where the fiduciary is doing his or her duties well. I see the cases that range from the boneheaded to the botched. That’s where I get my perspective.

So, we started with a title that is really a question: What are professional fiduciaries priorities? Property or people? I’ve seen too many trust cases where the professional fiduciary gave unequivocal priority to property over people. The property being the trust assets, and the people being the trust beneficiaries.

The way that some fiduciaries act you would think that there were absolutely no important considerations in trust administration other than trust assets. Trust beneficiaries are generally grieving and a clueless trustee’s focus on the gathering of trust assets over caring for the beneficiaries is insulting, degrading and worthy of reproach.

So, What’s a professional fiduciary’s number one priority in administering a trust? Is it to make sure that they get paid? That their lawyer protects them and gets paid with trust assets? To “marshal assets” to increase the efficiency of the trust while coldly ignoring and disregarding beneficiary needs? Or is it to maximize the profitability of trust assets for the trustee?

Despite what some might think, the answer is actually none of the above.
The top duty of any fiduciary or trustee is simple: to manage the trust solely in the interest of the beneficiaries. That comes straight from California’s Probate Code Section 16002, with emphasis on the word solely.

Not for the trustee to fatten their own wallet, not to distribute a bare minimum, and not to pay themselves more than the beneficiary. Fiduciary methods that prioritize profits over people are not only morally indefensible – they also violate the law.

The well-being of the beneficiary takes precedence over whatever an institutional or professional trustee might think their main mission is.
In practice, this translates to an active and continuing concern for the welfare of the beneficiary, what we know as the HEMS standard: health, education, maintenance and support.

The primary purpose of trust funds and assets is to serve the designated beneficiaries of that trust. When a fiduciary neglect their primary professional duty, it’s the beneficiary who suffers. Plenty of times we’ve seen a bad trustee act as if they’re untouchable – they’re confident that no one will hold them responsible. But that’s where they’re wrong.

Beneficiaries can fight back – there are experienced trust litigation attorneys who take on for-profit fiduciaries and protect the rights of their clients. Trustee removal, trust accountings, administrative complaints, if appropriate, and mediated resolutions are all options for legal action.

At Hackard Law we are dedicated to enforcing beneficiary rights. We represent clients in California’s largest urban areas, including in Los Angeles, Orange, Santa Clara, San Mateo, Alameda, Contra Costa and Sacramento.

We take substantial cases where we think that we can make a significant difference and there is a wrongdoer who can be made financially accountable for their wrongdoing or breach of duty.

If you’ve been wronged by a fiduciary and want to hold them to account, call us at 916-313-3030. We want to hear your story.