When Is Fiduciary Litigation Necessary in Probate Cases?

 Posted on June 16, 2023 in Estate Planning

By: Attorney John McNally and Law Clerk Nancy Cattani

Death is an inevitable part of life, but dealing with the aftermath of a person's death can be a challenging and emotional experience for their loved ones. When a person passes away, their estate will typically pass through probate court to ensure their debts are paid, their assets are distributed according to their wishes, and their affairs are wound up properly. However, disputes can arise during the probate process, especially if the decedent’s intentions were not clear or if disagreements arise among heirs, beneficiaries, or creditors. In some cases, family members or other beneficiaries may believe that an estate was mismanaged or that a person's assets were not distributed correctly. In these situations, fiduciary litigation may be necessary, and interested parties may take action against a party, such as an executor or trustee, for failing to properly execute their fiduciary duties. 

Issues that May Be Addressed Through Fiduciary Litigation

Multiple parties may be able to pursue litigation against a person who was responsible for managing an estate and following the instructions of the deceased. These cases may seek to address financial concerns or other matters, including:

• Breach of fiduciary duty - A fiduciary who has been appointed to manage an estate or trust has a legal obligation to act in the best interests of the beneficiaries. If a fiduciary fails to meet this obligation, this can result in significant losses for the beneficiaries. For example, mismanagement of an estate may result in assets decreasing in value, or an executor may make decisions that benefit themselves rather than the beneficiaries. Fiduciary litigation may be pursued by beneficiaries to recover damages that occurred because of the fiduciary's actions or to require the fiduciary to follow the decedent's instructions correctly.
• Accounting disputes - The fiduciary has a responsibility to provide an accurate and complete accounting of the assets in an estate or trust, while also specifying how assets were distributed to the beneficiaries. Disputes can arise when the beneficiaries believe that the accounting is inaccurate or incomplete. In such a case, the fiduciary may be required to provide a more detailed accounting to the beneficiaries to resolve the dispute.
• Will and trust contests - Probate litigation may address the validity of a will, or trust litigation may be necessary to determine whether a trust was established correctly. These cases may involve fiduciary litigation if beneficiaries believe that an executor or trustee acted improperly. For example, beneficiaries may claim that a will, filed in probate court by an executor, was not the most recent will signed by the decedent.
• Creditor claims - Creditors may seek to recover money owed to them by the decedent, and they may make claims against an estate. In such cases, fiduciary litigation may be necessary to determine the validity of the creditor’s claim and the priority of payment. If the fiduciary does not properly address creditor claims, this can lead to liability for the fiduciary.

Contact Our Milwaukee, WI Fiduciary Litigation Lawyers

While most probate cases can be resolved without litigation, there are certain situations where fiduciary litigation may be necessary. If you are concerned about how a loved one's trust or estate is being managed, Gimbel, Reilly, Guerin & Brown, LLP can help you determine your options for taking legal action against an executor or trustee. Our Milwaukee fiduciary litigation attorneys can help you determine if a fiduciary has breached their duties or if there may be other options for resolving disputes related to wills, trusts, or estates. Contact us at 414-271-1440 to set up an appointment and get effective legal help with your case.

Sources:

https://docs.legis.wisconsin.gov/statutes/statutes/857

https://docs.legis.wisconsin.gov/statutes/statutes/877