Managing an estate plan is complex for the trustee or executor in charge. In fact, many beneficiaries consider taking legal action against the manager for various circumstances.
Understanding when a beneficiary can file a lawsuit can help those who manage the estate.
Breach of fiduciary duty
Executors and trustees may have control over thousands, if not hundreds, of thousands of dollars on average. The average inheritance for Americans who receive one is approximately $124,000. When controlling a large sum of money, executors must care not to breach their fiduciary duty. They need to act responsibly in the best interests of the beneficiaries. If a beneficiary feels the executor has a conflict of interest, he or she may take legal action.
Lack of transparent communication
Open communication can help prevent disagreements from occurring. Beneficiaries need to remain current on the progress of the estate settlement, any changes to the plan and the status of the assets. If he or she feels uninformed or that the executor lacks communication, the beneficiary may assume that the executor does not have his or her best interests in mind.
Often, distrust can lead to allegations of mismanagement of assets like imprudent investment decisions or negligent estate handling that results in the estate diminishing in value.
Executors should consider ensuring that they do not cause any distrust between beneficiaries by remaining upfront and honest about the estate plan, including instances where the estate plan may have few to no updates. Beneficiaries may launch a lawsuit if they feel as though the estate plan does not cover their loved one’s wishes.