With the death of a loved one, normal routines and patterns can be thrown into disarray. That is why we encourage our clients to create an estate plan: so that in the days following a death, a trusted person can manage the assets of the deceased (decedent) and ultimately distribute them to the decedent’s loved ones.
If the decedent had a trust, the assets that were in the trust will be managed by a trustee. If the decedent had a will, or had no estate plan at all, the probate court will appoint a personal representative. In some cases there may be a trustee in charge of trust assets as well as a personal representative to administer other assets. These may or may not be the same person.
Usually, a trustee or personal representative is someone who was close to the decedent, and who was chosen because they were trusted to do a good job. But what happens if a trustee or personal representative isn’t doing their job? Is there anything that heirs or beneficiaries can do to protect their late loved one’s assets—and their own interests?
Personal representatives and trustees are both fiduciaries: someone who is in a position of trust, and responsible for putting the interests of others above their own. In the case of a trust, that means the trustee’s primary concern should be for what is best for the beneficiaries. In the case of a probate estate, the personal representative should be looking out for the interests of the heirs or those named in the decedent’s will.
Michigan law provides for fiduciaries to have certain powers to manage assets, as well as certain responsibilities to beneficiaries. These include the responsibility to keep estate or trust property separate from the fiduciary’s personal property, the responsibility to pursue claims on behalf of the estate or trust, the responsibility to file tax returns, and the responsibility to keep beneficiaries adequately informed. And, of course, the fiduciary has the responsibility not to misuse or mismanage assets.
Sometimes it is easy to tell when a fiduciary has breached their duty, as when they fail to file required reports or worse, embezzle funds. Other times it is more difficult. A beneficiary may think a fiduciary is mismanaging assets, for instance, when in reality the fiduciary is exercising discretion granted them under the law or a trust instrument. In other words, just because a beneficiary doesn’t approve of a fiduciary’s actions does not mean that the fiduciary is breaching their duties.
If you are unsure whether a fiduciary’s actions constitute a breach of duty, contact an experienced Michigan probate litigation attorney to discuss the situation and explore whether further action is warranted. If you believe the fiduciary of an estate or trust is committing deliberate theft of assets, you should contact an attorney without delay to protect estate or trust assets.
Probate and trust disputes are not just about money. A personal representative or trustee is often someone with whom beneficiaries have a personal and ongoing relationship, like a parent, step-parent, or sibling. Resolving the dispute is about more than preserving assets and protecting financial interests; it is about maintaining relationships (or at least not eroding them further).
Your probate litigation attorney should be looking at the big picture with you: what is at stake if you challenge the fiduciary’s actions, or if you don’t? That is not to say that you should let a violation of duty go unaddressed to avoid “rocking the boat” of family relationships. But together with your attorney, you should consider the most effective way to solve the problem without damaging relationships you value.
There are different reasons that a trustee or personal representative may not be doing their job. They may be inexperienced or overwhelmed. They may not have the legal guidance they need. And yes, sometimes, they may be looking out for their own interests instead of those of the beneficiaries of the trust or estate.
Your attorney will help you explore options for dealing with the situation. For instance, probate mediation may allow you to resolve a dispute in a less adversarial way than litigating. Probate mediation allows parties to a dispute to sit down with a trained, neutral mediator, express their concerns, and work out a resolution together. Almost any probate dispute can be mediated, and this process can keep tensions from escalating while allowing for a customized resolution to a dispute.
Of course, mediation requires all parties to acknowledge a problem and be willing to work on it together. If the fiduciary denies that there is an issue, or is unwilling to mediate, you may have no choice but to file an action in the probate court to compel the fiduciary to perform his or her duties.
We invite you to contact our law office to discuss your situation and review your options. We look forward to working with you.