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4 signs a trustee is violating their fiduciary duty

A trustee is the person who manages a trust’s property and general finances. That’s a powerful position. As such, they have what is called a “fiduciary duty” to put the interest of the trust and its beneficiary ahead of their own.

It’s sometimes difficult for beneficiaries of a trust to know when a trustee is violating their duty, but there are usually some common signs. They include the following.

Failures to communicate

When a trustee fails to communicate important changes with the trust or big decisions that have been made about its assets, that may be a sign they’re trying to keep things “under wraps.”

Lack of transparency

When a trustee is reluctant to open their books or their record-keeping seems inadequate, inaccurate or haphazard, there’s a distinct possibility that they may be trying to hide unauthorized or improper transactions.

Conflicts of interest

“Self-dealing,” which occurs when a trustee uses the trust to their own advantage (whether or not it also advantages the trust or its beneficiaries) is a serious issue. Examples include using funds from the trust to invest in a business they have a stake in, buying property from the trust at a below-market price or selling their own property to the trust at inflated values.


Sometimes a trustee’s violation of their fiduciary duty isn’t even intentional. They may just not be very good at their job. If a trustee makes profoundly poor investment decisions that lead to significant financial losses, that’s an issue.

These are far from the only red flags when it comes to trustees, but they are some big ones. If you’re concerned, find out more about your legal rights and what steps you can take next by seeking legal guidance accordingly.