Breach of Fiduciary Duty in Oklahoma Trusts: When Beneficiaries Can Sue a Trustee (and What They Need to Prove)
Trustees are meant to protect and manage trust property for the beneficiaries named in the trust. When that relationship works, beneficiaries receive distributions, get information on how the trust is being managed, and enjoy the benefits of responsible administration. But when trustees misuse funds, hide information, or favor one beneficiary, it’s important for beneficiaries to look into legal action. At that point, you may need to reach out to a trust litigation attorney in Oklahoma.
At Entz Burton & Associates, we help clients throughout Oklahoma navigate issues with trusts, whether they serve as trustee or are beneficiaries of a managed trust. Attorney J. Michael Entz has spent over 30 years advocating for clients and becoming a trusted resource for estate planning concerns. Learn more about how our trust litigation law firm can help you by calling us at 405-773-9800.
What Fiduciary Duties Does an Oklahoma Trustee Owe?
Serving as trustee is not just a ceremonial position or a chance to do something helpful for the family. A trustee is a fiduciary, which means they have a high level of responsibility to the trust and its beneficiaries. They do not own the trust property and cannot use it for their own personal use. They are solely allowed to hold and manage it for the benefit of the beneficiaries.
The duties of a trustee include duties of loyalty, to act prudently, to follow the trust document, and to treat beneficiaries fairly. Per Oklahoma law, trustees must invest and manage trust assets in a way that suits the best interests of the beneficiaries.
Additionally, they are expected to keep proper records, safeguard trust property, avoid conflicts of interest, and provide information when beneficiaries are entitled to it. When a trustee fails to fulfill these duties, beneficiaries may loop in a trust litigation lawyer.
Common Examples of Breach of Fiduciary Duty in a Trust
Trust disputes may start when beneficiaries notice that something is missing, payments are delayed, or questions go unanswered. Common forms of trustee misconduct include using trust funds for personal expenses, transferring trust property to themselves, selling property below market value, refusing to provide an accounting, and making distributions that favor one beneficiary over the other.
When Can Beneficiaries Sue a Trustee in Oklahoma?
Beneficiaries may turn to a trust litigation attorney to start legal action when informal requests do not resolve the issue. If a trustee refuses to explain trust finances and denies requests to provide records, beneficiaries may have no other option but to sue them.
A trust litigation lawyer may also help if a trustee is withholding distributions without a reason, selling real estate under suspicious circumstances, or doing things that decrease the value of the trust. Under Oklahoma law, the court can address breaches that have already occurred and breaches that may occur if they do not act.
Proving a Trustee Misconduct Claim
Proving a misconduct claim can be difficult when a trustee holds all of the trust records and documentation. Beneficiaries should gather anything they can use to prove that the trust exists, that the person they are suing is the trustee, and that the trustee violated those duties. Attempts to communicate with the trustee can be helpful, as can proof of financial harm suffered by the beneficiaries.
For many, the first step is talking to a lawyer. From there, the lawyer can determine which evidence would be helpful and help the beneficiaries recover it.
Remedies That May Be Available for Breach of Trust
If a trustee has breached their duties, Oklahoma courts may grant several different remedies. They may compel the trustee to perform their duties, stop them from committing a breach, order the trustee to address the breach by repaying funds, or require the trustee to provide an accounting.
In other cases, the court may appoint a temporary trustee, suspend or remove the trustee, or reduce the trustee’s compensation.
Plan Your Next Steps With Our Oklahoma Trust Litigation Law Firm
If you’re afraid that your trust is being managed by a trustee who’s breached their duties, we’re here to help. Let’s discuss your next steps and legal options. Call us at 405-773-9800 or reach out online now.
Attorney J. Michael Entz at Entz Burton & Associates is an experience lawyer in estate planning law, business formation and asset protection serving the families in Oklahoma City and Weatherford office.
