Albuquerque Breach of Fiduciary Duty Attorneys
When an individual in Albuquerque is entrusted by someone else to manage certain assets or legal affairs, they have what is known as a “fiduciary duty”. This duty requires them to act in good faith to further the interests of the principal assets in question as well as the interests of the people who may own or directly benefit from said assets. In other words, people assigned a fiduciary responsibility to have a legal obligation to act morally and competently, to the best of their ability.
When someone fails to carry out their responsibilities while in this position, it is known as a breach of fiduciary duty. While it may be true that New Mexico law does not have specific statutes for many breaches of fiduciary duty scenarios, it does have other laws requiring individuals in a fiduciary relationship to act in good faith.
If you or a close loved one have experienced difficulties, mismanagement, fraud, or other illicit behavior committed by someone assigned with a fiduciary duty, it is critical to act soon. You must be prepared to document the breach and submit an appropriate complaint to the Second District Court of New Mexico (or another appropriate legal venue).
New Mexico Financial & Family Law is here to assist you. We provide legal representation, case management, and rigorous investigation for sensitive legal and financial matters where a breach of fiduciary duty may have occurred. Our aim is to always protect the legal interests of our clients while arming them with the legal knowledge and resources they need to fight back.
Reach out to us if you have any concerns at all, and we will be able to explain your available courses of action for moving forward. Schedule a confidential consultation and case review now when you call (505) 503-1637 or contact us online.
Does New Mexico Law Protect Victims of Breach of Fiduciary Duty in Albuquerque?
In most scenarios, yes.
Breach of fiduciary duty can apply to any of the following:
- A trustee who mismanages or embezzles assets held in trust
- A financial officer or other designate acting in the interests of shareholders or a privately held company
- An individual assigned with guardianship or conservator status
- Someone granted the durable financial power of attorney
- A professional service provider (accountant, insurer, etc.) who acts in bad faith for the purposes of self-gain or to cover up gross incompetence
It is true that New Mexico lacks statutory language covering all of the above scenarios under a cause of action (reason to sue) known as “breach of fiduciary duty”. Notwithstanding, individuals in New Mexico are protected by a host of other laws and court precedents enforcing good-faith behavior on the part of a fiduciary.
New Mexico Statutes §55-3-307, for example, allows for a process where a represented person with interests in a specific instrument (such as a trust) to send official notice of a breach of fiduciary duty when illicit behavior is suspected or detected. The trustee (or another fiduciary party) may then be held liable for the damages they have inflicted.
In a 2016 case where the FDIC sued multiple individuals for a breach of fiduciary duty, the United States District Court for the District of New Mexico upheld that the FDIC had grounds for doing so, despite the lack of specific language in state statutory law.
However, another case in the same federal district court found that a plaintiff must make specific showings that an insurance provider, acting as fiduciary, behaved in a way that breached their fiduciary duties. It is, therefore, extremely important to have a thorough knowledge of the statutory law and prior case outcomes before pursuing such a case.
New Mexico Financial & Family Law has been providing services for sensitive financial matters since 2005. We understand the expectations placed upon fiduciaries and are prepared to hold them accountable for bad faith actions that fall outside the acceptable boundaries. Contact us for assistance on building your case, researching the appropriate legal theories, and working to prove your assertions to the fullest extent of the law.
What Constitutes a Breach of Fiduciary Duty?
A breach of fiduciary duty occurs any time someone designated with “fiduciary” status fails to uphold their expected duties. A fiduciary can be anyone who has entered into a formal relationship with another party, which can include spouses, attorneys, business partners, and other common situations. However, a breach of fiduciary case most often involves someone designated to a position of power and responsibility and who either abuses that power or neglects their duties to the point of measurable harm.
Attorneys typically get involved in cases involving a fiduciary who is:
- An executor/administrator of an estate
- A trustee overseeing estate funds and assets
- Someone with the power of attorney, guardian, or conservator status
- Business partners and professional service providers who mishandle finances, misrepresent their actions, or otherwise engage in bad faith tactics
Fiduciaries have a legal obligation — otherwise known as a duty — to act in the interests of the parties involved. These parties include the person who designated them, the beneficiaries of an estate/trust, or even the estate or corporate entity itself. When these duties are breached, the harmed parties can file a complaint and attempt to hold the fiduciary accountable for the damages they have caused.
What Are the Duties of a Fiduciary?
The exact duties assigned to a fiduciary will vary depending on the situation and any contracts or legally binding instruments involved. For example, a trustee may be given specific responsibilities related to accounting for the trust’s contents on a regular basis and only make decisions in compliance with the trust’s terms.
However, there are several duties that a fiduciary will hold, in general:
- To be open, transparent, and honest in all matters
- To be forthcoming with any information that would be relevant
- To act in the interests of the other parties, including partners, beneficiaries, grantors, testators, etc.
- To act in a reasonable manner and in good faith
- To not put their own interests above the interests of other involved parties
What Does a Breach in Fiduciary Duty Mean?
A breach can involve any number of possible scenarios, all of which have the common thread that the fiduciary failed to exercise their duties at the expense of the interested parties.
Breaches in fiduciary duty commonly refer to a situation where someone has committed fraud, abused their power, or acted in a manner that furthers their own interests. A breach can also involve negligence. “Negligence” as a legal concept generally means that the fiduciary failed to uphold their duties as expected by the contract or by state/federal law.
In other words, a fiduciary doesn’t necessarily have to act with intent, malice, or self-interest in order to commit a breach. They may have instead been careless or neglectful to the point that a breach has occurred.
A breach can include:
- Lying about assets and actions taken in reference to them
- Acting in bad faith to enrich themselves
- Ignoring specific duties, such as failing to file reports in a timely manner
- Mismanaging estates/trusts in such a way that diminishes their value
- Acting in an unreasonable and irresponsible manner, causing harm
Filing a Breach in Fiduciary Duty Claim
In order to file a claim against someone for a breach of fiduciary duty, the plaintiff has to be prepared to clearly demonstrate a few key factors:
- The subject of the complaint had a legitimate fiduciary relationship recognized by the law
- The fiduciary had specific duties or a general obligation to act in a lawful manner, which they failed to uphold
- The breach in fiduciary duty resulted in damages to the plaintiff that can be restored through the legal process
Note that some fiduciaries are granted broad powers and have the freedom to make their own decisions. In a case where a decision was determined to be poor in hindsight, the plaintiff may not be able to demonstrate a clear breach of duty. To argue a breach occurred, the plaintiff must be prepared to show a specific action constituting a breach, such as an unreasonable decision, an action taken in bad faith to enrich the fiduciary, or an action directly contrary to the fiduciary agreement.
A successful breach of fiduciary duty claim can allow the plaintiff to recover damages and to obtain specific court orders that can prevent further harm from occurring. The fiduciary may be removed from their duty, or they may be ordered to comply with rules intended to reduce the chances of mismanagement, unreasonable behavior, neglect, or bad faith tactics.
Breach of Fiduciary Common in Aspects of Elder Law
Tragically, a breach of a fiduciary is more likely to occur in a situation with an older adult wishing to have someone assist with managing assets or making important decisions. The older adult may also have passed, and the fiduciary in question may be an executor of the decedent’s estate or a trustee responsible for distributing assets to beneficiaries.
The following are some of the most common breaches of fiduciary duty scenarios seen in elder law:
- Someone with power of attorney commits fraud or abuses their power to transfer assets to their own holdings
- A guardian or conservator makes decisions not in the interests of their ward and for their own personal gain
- Someone in a professional service relationship defrauds, manipulates, or coerces the victim into making decisions against their own interests and in the interests of the abuser
- An estate administrator/trustee embezzles assets or commingles them with their own
- An estate administrator/trustee omits or misrepresents information related to the estate in a wrongful way
Reach Out to a Breach of Fiduciary Lawyer the Moment Suspicions Arise
Whether the holder of the assets managed by the fiduciary is currently living or recently deceased, breach of fiduciary duty and fiduciary abuse are serious matters. It is vitally important to examine the factors involved and to determine if there is a legal case to be made for breach of fiduciary duty as soon as possible. The window for contesting probate can be small, and critical evidence could be lost if there is a failure to act.
Voice your concerns to an experienced breach of fiduciary duty lawyer in order to assess your case and potentially start the process of filing a complaint. By acting quickly, it may be possible for certain court orders or motions to prevent the fiduciary from causing further harm. In any event, it is important to begin assembling the details of your case and to start pursuing the matter as soon as possible.
Schedule a confidential case review with no obligation today when you call (505) 886-9606 or contact us online.