Fiduciary Litigation Attorneys

Fiduciary litigation is the set of court proceedings that hold an executor, administrator, trustee, guardian, or agent under a power of attorney to the duties the law imposes on anyone who manages another person’s property. Beneficiaries use it to find out what happened to an estate or trust, to recover losses, and to replace a fiduciary who cannot or will not do the job. Fiduciaries use it to defend their decisions and to obtain a court’s approval that ends their exposure.

Disputes may concern missing information, delays in distributions, transactions with relatives, estate expenses, or investment decisions. Reviewing the governing documents and financial records helps distinguish communication problems from conduct that may support a legal claim.

Milvidskiy Law Group P.C. represents beneficiaries pursuing fiduciaries and fiduciaries defending their administration in the Surrogate’s Court, the Superior Court, and the Probate Court. Our attorneys also serve as executors and trustees and advise fiduciaries on administration, which informs how we evaluate what a fiduciary should have done.

What a Fiduciary Owes

The duties are the same in substance whether the fiduciary is an executor administering an estate, a trustee administering a trust, a guardian or conservator managing an incapacitated person’s affairs, or an agent acting under a power of attorney:

• Loyalty. The fiduciary acts for the beneficiaries, not for themselves. Buying estate property, lending estate funds to themselves, paying themselves undisclosed fees, and steering business to their own company are the classic breaches.
• Prudence. Assets must be protected, invested sensibly, and insured. Leaving a portfolio in cash for years, letting a building deteriorate, or failing to collect a debt can all be breaches.
• Impartiality. The fiduciary may not favor one beneficiary over another except as the instrument directs, which is often the issue when the fiduciary is also a beneficiary.
• Disclosure and accounting. Beneficiaries are entitled to information about the estate or trust and, at the appropriate time, to a formal accounting of every receipt and disbursement.
• Adherence to the instrument. The will, trust, or court order sets the fiduciary’s powers, and distributions or investments outside those powers are breaches even if well intentioned.

The Claims We Bring and Defend

• Compelled accountings when a fiduciary will not provide information or a formal account.
• Objections to an accounting, challenging specific transactions, fees, valuations, and omissions.
• Surcharge, the fiduciary’s personal liability for losses caused by a breach, with interest.
• Removal of a fiduciary who has breached duties, is unfit, or cannot work with co-fiduciaries, and appointment of a successor.
• Self-dealing and conflict claims, including unwinding sales to the fiduciary or the fiduciary’s relatives.
• Denial or reduction of commissions and fees for a fiduciary whose administration was deficient.
• Turnover and discovery proceedings to recover estate property held by a fiduciary or a third party.
• Claims against agents under powers of attorney for gifts, transfers, and expenditures that exceeded their authority, which often overlap with financial exploitation claims.
• Defense of fiduciaries against each of the above, and petitions for judicial settlement that obtain a court’s approval of the administration.

How the Proceedings Work in Each State

New York

Estate and testamentary trust matters are heard in the Surrogate’s Court. A person interested in the estate, a creditor, a co-fiduciary, or a surety may petition to compel the fiduciary to account, and the court may suspend a fiduciary who ignores the citation, appoint a successor, and set the matter down for a hearing on removal.

Once an accounting is filed, beneficiaries file objections, discovery follows, and the court decides each objection and settles the account. Letters may be suspended or revoked on grounds that include wasting or improperly applying assets, dishonesty, disobeying a court order, unfitness, and failing to account when directed. Trustees of lifetime trusts may be suspended or removed by the Supreme Court where the trustee has violated or threatens to violate the trust, is insolvent, or is otherwise unsuitable.

New Jersey

Fiduciary disputes are heard in the Superior Court, Chancery Division, Probate Part. An executor or administrator may be required to account there, though ordinarily not until a year after appointment unless special cause is shown.

The court may remove a fiduciary who fails, after an order, to file an inventory, account, or security; disobeys another court order; embezzles, wastes, or misapplies estate property or abuses the trust placed in them; leaves the state and neglects the administration; becomes incapacitated; or, as a co-fiduciary, refuses to cooperate in a way that hinders the administration. A settlor, co-trustee, or beneficiary may ask the court to remove a trustee on the same grounds, and the court may grant interim relief to protect the trust property while the request is pending.

Connecticut

The Probate Court has jurisdiction over the accounts of executors, administrators, conservators, guardians, and testamentary trustees, and a beneficiary of a lifetime trust may petition the Probate Court for an accounting by that trustee as well. Conservators, guardians, and testamentary trustees must file accounts at least every three years unless the will excuses it, and a final account is required in any event.

On petition of any interested person, or on its own motion, the court may remove a fiduciary who is incapable, neglects the duties of the office, wastes the estate, or fails to furnish a required bond; where lack of cooperation among co-fiduciaries impairs the administration; where unfitness, unwillingness, or persistent failure makes removal the course that serves the beneficiaries’ interests; or where circumstances have changed and a suitable successor is available. Trustees are subject to parallel removal provisions under Connecticut’s trust code. Decrees are appealable to the Superior Court within a short period.

The Accounting Proceeding

An accounting is a formal schedule of everything the fiduciary received, spent, sold, distributed, and still holds, with the supporting documents. It is the point at which a fiduciary’s decisions are tested and, if approved, become final. For a beneficiary, it is the only reliable way to learn what happened; for a fiduciary, it is the way to obtain a release from liability. Objections are specific: a sale below value, a payment that was not an estate expense, an investment that was imprudent, a fee that was not earned, an asset that is missing. Each objection is litigated on the documents and testimony, and the court surcharges the fiduciary for losses it finds. Records maintained during probate and estate administration and trust administration provide the basis for reviewing the fiduciary’s conduct.

Defending a Fiduciary

A fiduciary’s defense begins with reconstructing the records, because a fiduciary who can document every transaction has answered most objections before they are argued. It continues with the instrument, which often authorizes what the beneficiaries call a breach, and with the standard of care, which asks whether the decision was reasonable when made rather than whether it turned out well.

Beneficiaries who consented to or ratified a transaction, who signed releases, or who waited beyond the limitation period may be barred from challenging it. Where a loss did occur, the question becomes its measure, and a negotiated resolution often serves a family fiduciary better than a trial. We can pursue a negotiated resolution through alternative dispute resolution.

Remedies

• Surcharge: a money judgment against the fiduciary personally for the loss to the estate or trust, often with interest.
• Trustee removal and replacement, with a successor chosen by the court or under the instrument.
• Denial or reduction of commissions and disallowance of the fiduciary’s legal fees.
• Rescission of self-dealing transactions and return of the property.
• Constructive trust and turnover orders directed at the fiduciary or at third parties holding estate property.
• Injunctions and restraints that freeze accounts or prevent a sale while the case is decided.

What Our Fiduciary Litigation Service Includes

• An early assessment of the administration: what the instrument required, what the fiduciary did, what the records show, and what remedy fits.
• Demands for information and, where necessary, petitions to compel an accounting.
• Review of accountings and preparation of specific, documented objections.
• Petitions for removal, suspension, and interim relief, and for appointment of a successor.
• Discovery, forensic accounting where warranted, and trial of contested objections.
• Defense of fiduciaries, including reconstruction of records, preparation and judicial settlement of accountings, and negotiation of releases.
• Service as successor executor or trustee through our professional fiduciary services where the court or the family wants a neutral.

When Fiduciary Litigation Is Not the Right Path

Delay alone is not a breach. Estates take time, especially where real estate must be sold, tax returns filed, or creditors’ periods run, and a written request for information may be an appropriate first step when the concern is delay. A decision that turned out badly is not a breach if it was reasonable when made. And a dispute about what the will or trust means is a construction question, not a fiduciary claim, though the two are often brought together. Where the concern is really about the validity of the document rather than its administration, the proper proceeding is a will contest. We assess which of these applies before recommending litigation, because a petition filed against a fiduciary who has done nothing wrong costs the estate money that would otherwise go to the beneficiaries.

Schedule a Consultation About a Fiduciary Dispute

If you are a beneficiary who cannot get answers, or a fiduciary facing objections or a removal petition, bring the will or trust, any correspondence, and whatever financial records you have. Our attorneys practice in New York, New Jersey, and Connecticut and appear in each state’s probate courts. Contact Milvidskiy Law Group P.C. to schedule a consultation.

This page is provided for general informational purposes only and does not constitute legal advice. Laws differ by state and change over time. For advice about your situation, consult a qualified attorney.