• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • Home
  • WHO WE ARE
    • About Our Firm
    • Attorney and Staff Profiles
    • News and Events
  • Areas We Serve
    • Essex County, MA
      • Andover
      • Beverly
      • North Andover
    • Hillsborough County, NH
      • Manchester
      • Nashua
    • Middlesex County, MA
      • Concord
      • Lexington
      • Wakefield
      • Winchester
      • Woburn
    • Rockingham County, NH
      • Exeter
      • Londonderry
      • Salem
  • Services
    • Asset & Business Planning
    • Elder Law & Medicaid Services
    • Estate And Gift Tax Figures
    • Family-Owned Businesses & Farms
    • Legacy Planning Services
    • LGBTQ Estate Planning
    • Loss Of A Loved One
    • Pet Planning
    • Power Of Attorney
    • Probate and Trust Administration
    • SECURE Act
    • Special Needs Planning
    • Young Families
  • Elder Law
    • Coping with Alzheimer’s
    • Hospice Care
    • Medicaid Planning
    • Nursing Home Planning
  • Resources
    • Elder Law
      • Elder Law & Medicaid Definitions
      • Elder law reports
      • Elder Law Resources
        • Elder Law Resources – Londonderry, New Hampshire
        • Elder Law Resources North Andover, Massachusetts
        • Nashua, New Hampshire Elder Law Resources
        • Woburn, MA Elder Law Resources
    • Estate Planning
      • Estate Planning Articles
      • Estate and Gift Tax Figures
      • Estate Planning Checkup
      • Estate Planning Definitions
      • Estate Planning Reports
        • Advanced Estate Planning
        • Basic Estate Planning
        • Estate Planning for Niches
        • Trust Administration
      • Incapacity Planning Definitions
      • Is Your Estate Plan Outdated?
      • Top 10 Estate and Legacy Planning Techniques
    • Free Estate Planning Worksheet
    • Frequently Asked Questions
      • Asset Protection Planning
      • Business Planning
      • Charitable Gifting
      • Estate Planning
      • Elder Law
      • Frequently Asked Questions for Families Without an Estate Plan
      • Incapacity Planning
      • Legacy Wealth Planning
      • LGBTQ Estate Planning
      • Medicaid Planning
      • Trust Administration & Probate
      • Wills and Trusts
    • Medicaid Calculator
    • Newsletters
    • Presentations
    • Probate and Trust Administration
      • Bereavement Resources
      • How to Know if You Need Extra Help With Your Grieving
      • Loss Of A Loved One
      • Probate Resources
        • Nashua, New Hampshire Probate Resources
        • Probate Resources – Londonderry, New Hampshire
        • Probate Resources – North Andover, MA
        • Probate Resources – Wakefield, Massachusetts
        • Woburn, MA Probate Resources
      • The Mourner’s Bill of Rights
      • Things You Need To Do When a Loved One Passes Away With a Trust
      • Things You Need To Do When a Loved One Passes Away With a Will
      • Trust Administration & Probate Definitions
    • Published Books
  • Seminars
    • Live Seminars
    • Online Seminars
  • Videos
  • Contact Us
  • Blog
  • Reviews
    • Our Reviews
    • Review Us

DeBruyckere Law Offices, PC

Serving Southern New Hampshire & Essex Country, Massachussetts

Call us today(603) 894-4141

(978) 969-0331

Online Seminars
Attend Free Seminar
Home » Estate Planning » Understanding Fiduciary Self-Dealing

Understanding Fiduciary Self-Dealing

February 25, 2020Estate Planning

  • North Andover area estate planning attorney

While creating or updating your estate plan you will likely need to appoint more than one person to a fiduciary position. A fiduciary position is a position of trust — and that trust can be broken. For example, a Trustee could break that trust be engaging in self-dealing. Knowing that, you should take as much time as is necessary contemplating your choice before deciding who the best person (or agency) is for the position. To help you understand the importance of choosing the right person for the job, a North Andover area estate planning attorney at DeBruyckere Law Offices explains fiduciary self-dealing.

What Is a Fiduciary and How Do They Fit into an Estate Plan?

In very broad terms, a fiduciary is a person (or agency) that is in a position of trust over someone else. Within your estate plan, there are frequently several fiduciary roles. The most common example of a fiduciary is the Trustee you must appoint when you create a trust. In addition, the person you name as the Executor of your estate as well as someone you name as an Agent under a Power of Attorney are also in fiduciary roles within your estate plan.

What Is a Trustee’s Fiduciary Duty?

The duty of loyalty a Trustee has to the beneficiaries of a trust is among the most fundamental of the duties a Trustee has during the administration of a trust. Most of the time a Trustee performs the duties and responsibilities associated with the administration of the trust conscientiously and with great care; however, there are times when a Trustee does not perform his/her duties quite so admirably. Self-dealing by a Trustee is one way that a Trustee can violate the fiduciary duty the Trustee has to the trust and to the trust beneficiaries.

What Is Self-Dealing?

In simple terms, self-dealing by a Trustee occurs when the Trustee places his/her own interests over those of the beneficiaries. When a Trustee places his/her own interests ahead of those of the trust beneficiaries, it creates a conflict of interest.  That conflict of interest can be devastating to the administration of the trust.

Self-dealing can take several forms from outright stealing to much more subtle actions that amount to self-dealing.  A Trustee could simply move assets out of the trust and into his/her name. More often, however, self-dealing is more subtle. For example, a Trustee might move assets from one holding account to another until they eventually end up in an account owned by the Trustee or an account that benefits the Trustee.

Another example of a fiduciary within your estate plan is the Agent you appoint when you execute a Power of Attorney. That Agent might engage in self-dealing if he/she uses the authority granted by the POA to gift himself/herself property owned by the Principal or to purchase assets owned by the Principal or less than fair market value.

A fiduciary may also be entitled to a fee for his/her services. Administering a trust can be a drain on the Trustee’s time which is why a fee is reasonable. An excessive fee, however, is not acceptable and could even rise to the level of self-dealing. For example, if a Trustee routinely bills a trust for hundreds of dollars when all the Trustee did that month was drive by the trust property to make sure everything appeared to be in order. Another example involves a Trustee using trust assets to purchase things for him/her that have nothing really to do with trust business. 

These are just a few examples of self-dealing by a Trustee. A beneficiary who has been injured (financially) as a result of self-dealing by a Trustee does have legal remedies available; however, it is always best to try and prevent the harm in the first place. One way to do that is to consult with your estate planning attorney regarding your choice of Trustee when you create a trust. Instead of simply appointing someone close to you, take the time to honestly evaluate a candidate’s suitability for the position.

Contact a North Andover Area Estate Planning Attorney

For more information, please join us for an upcoming FREE seminar. If you have additional questions about fiduciary self-dealing, contact a North Andover area estate planning attorney at DeBruyckere Law Offices by calling (603) 894-4141 or (978) 969-0331 to schedule an appointment.

Who should I appoint as my Trustee?

It may be tempting to appoint someone close to you as your Trustee; however, appointing a professional is often the better choice because it dramatically reduces the likelihood of mismanagement and increases the likelihood of successful administration of the trust.

Can a Trustee be removed?

Yes. If the Settlor does not include language allowing the beneficiaries to remove a Trustee, they can always petition a court for the Trustee’s removal for cause. 

How can I prevent self-dealing by a fiduciary?

Choosing the right person for the job is the first step. Including remedies for your beneficiaries within the trust itself can also help. The most important thing you can do to prevent a wide variety of potential problems, however, is to consult with your estate planning attorney during the creation of the trust.

  • Author
  • Recent Posts
Daniel DeBruyckere
Daniel DeBruyckere
Attorney Daniel A. DeBruyckere has been practicing law in New Hampshire and Massachusetts since 1998, and has helped hundreds of clients with their estate planning and elder care issues. He is very well respected in the area of estate planning, probate, trust administration, elder law issues, and business planning.
Daniel DeBruyckere
Latest posts by Daniel DeBruyckere (see all)
  • Do I Need an Attorney to Administer a Trust? - January 26, 2023
  • How Using a Trust Can Protect a Valuable Inheritance - January 24, 2023
  • What Seniors Need to Know to Protect Assets - January 19, 2023

Other Articles You May Find Useful

Beverly estate planning attorney
Do We Need an Estate Plan If We Do Not Plan to Have Children?
Beverly estate planning attorneys
Am I Entitled to Social Security Based on My Spouse?
Beverly estate planning attorney
Make Reviewing Your Estate Plan Your New Year’s Resolution
Common Mistakes In Estate Planning 150x150
Common Mistakes in Estate Planning – Part III
Common Mistakes In Estate Planning 150x150
Common Mistakes in Estate Planning – IV
Beverly estate planning attorneys
15 Things to Do Following the Death of a Loved One

Download our free Estate Planning Worksheet

There's a lot that goes into setting up a comprehensive estate plan, but with our FREE worksheet, you'll be one step closer to getting yourself and your family on the path to a secure and happy future.
  • This field is for validation purposes and should be left unchanged.

Follow Us

  • Facebook
  • Twitter
  • Linkdin
  • Youtube
  • Instagram

Blog Subscribe

"*" indicates required fields

This field is for validation purposes and should be left unchanged.

Testimonials

DeBruyckere Law Offices, PC footer

Connect with Us

  • Facebook
  • Twitter
  • Linkdin
  • Youtube
  • Instagram
footer-logo

© 2023 DeBruyckere Law Offices
All Right Reseved.

Attorney Advertisement

© 2023 American Academy of Estate Planning Attorneys, Inc.