Breach of Trustee’s Fiduciary Duty in Mississippi

Breach of Trustee’s Fiduciary Duty in Mississippi
August 17, 2014 msverdict
by msverdict
August 17, 201410:58 pm

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.