Removal of Fiduciary Duties

When a person is appointed to handle someone else’s assets or financial affairs, the law expects that individual to act responsibly. This means both ethically handling the estate assets while also keeping beneficiaries updated on their progress. Unfortunately, not every executor or trustee upholds their obligations to the beneficiaries of the trust or estate.

If you are concerned about the behavior of a fiduciary in a trust or estate that you have an interest in, now is the right time to explore your legal options. A Montgomery County removal of fiduciary duties attorney can help evaluate the situation and determine whether legal action may be appropriate.

What Is a Fiduciary Duty?

Unlike ordinary business relationships where you are entitled to look out for your own interests, fiduciary relationships require a higher degree of loyalty. This higher level of obligation is usually held by someone in a position of trust, like the executor of an estate.

In estate and trust matters, fiduciaries have the authority to act on behalf of others regarding assets and investments. Fiduciaries are required to prioritize the beneficiary’s needs when they agree to step into this role.

Pennsylvania law provides mechanisms for removing fiduciaries who fail to perform these duties. For example, 20 Pa. Cons. Stat. § 3182 authorizes courts to remove personal representatives under certain circumstances when removal is in the best interests of the estate.

When Can I Remove a Fiduciary?

If you are the beneficiary of a trust or estate, the courts aren’t going to let you remove a fiduciary based on a whim. Instead, a judge will consider removal when the fiduciary’s conduct puts the trust or estate assets at risk. Some common grounds for removal include the following:

Waste of Property

One of the most common reasons for removal involves poor management of assets. Fiduciaries are expected to preserve and safeguard property at all times, so failing to do so can directly harm the beneficiaries. When this happens, courts may determine that removal is necessary.

Self-Interested Transactions

A fiduciary cannot use their position to enrich themselves at the expense of beneficiaries. This is true whether it involves the trustee buying assets from the trust at a discount or providing a service to an estate at a cost far beyond the market rate. Because fiduciaries are expected to remain loyal to the people they serve, courts closely scrutinize transactions involving personal benefit.

Failure to Communicate or Provide Information

Beneficiaries have a legitimate interest in understanding how assets are managed. When fiduciaries refuse to answer questions, fail to provide records, or ignore requests for information, concerns naturally arise. In many cases, beneficiaries are entitled to accountings and updates regarding the administration of the estate or trust.

Physical or Mental Limitations

Sometimes a fiduciary’s removal has nothing to do with wrongdoing. There are times when a fiduciary is no longer able to serve in this role, necessitating their replacement. Some of the most common reasons for this are health issues, cognitive decline, or other impairments that make it impossible to serve.

Extreme Conflict With Beneficiaries

Disagreements are common during estate and trust administration. However, some conflicts become so severe that they interfere with the fiduciary’s ability to do the job. If these issues are serious enough to hamper the trust’s ability to function, it may be necessary to seek a change.

The Montgomery County Orphans’ Court Process

Fiduciary removal cases are generally handled through the Orphans’ Court Division. The steps of this process include the following:

Filing a Petition

The first step in this process is filing a petition with the court. When you file a petition, it should name the parties, identify the reasons a change is necessary, and include details supporting your case. It’s not enough just to ask for the removal of a fiduciary.

Court Review and Hearings

Once the matter is before the court, the judge reviews the evidence presented by both sides. This usually involves reviewing a wide range of financial records and accountings, especially when accusations of fraud have been made. Unlike many civil lawsuits, these matters are generally decided by a judge rather than a jury.

Understanding The Surcharge

Removal is not the only remedy available once the judge determines a fiduciary duty was breached. If the fiduciary caused financial harm through negligence, misconduct, or improper transactions, the court may impose a surcharge. A surcharge requires the fiduciary to reimburse the estate or trust for losses resulting from their actions. The possibility of surcharge provides an important layer of protection for beneficiaries.

Talk to a Montgomery County Removal of Fiduciary Duties Attorney Today

If you are concerned that a trustee or estate administrator isn’t protecting your interests, it’s important for you to explore your legal options right away. A Montgomery County removal of fiduciary duties attorney can answer your questions and guide you through the process. Call Klenk Law today for a confidential consultation.

Frequently Asked Questions

Can a fiduciary be removed for poor communication?

Yes, it’s possible to remove a fiduciary for poor communication, especially when they have failed to comply with the requirements in the trust document.

Does a beneficiary need proof before filing a petition?

Specific evidence is helpful, but beneficiaries often seek records and accountings through the legal process to uncover additional information.

Can an executor and trustee both be removed?

Yes. Courts have the authority to remove various types of fiduciaries when circumstances justify such action.

What happens after removal?

The court generally appoints a successor fiduciary to continue administering the estate, trust, or protected person’s affairs.

Is removal the only remedy available?

No. Courts may also order accountings, impose surcharges, or grant other relief depending on the facts of the case.