For more than 90 years, Casey Lundregan Burns, P.C., has helped Massachusetts families set clear rules and fix problems when a fiduciary role gets tough. This guide walks through the basics of fiduciary duty, common disputes, power of attorney rules, and trust accounting, with a focus on Massachusetts practice.
What is a Fiduciary and Why is it Important?
A fiduciary is a person who manages assets for someone else, and they must put that person first. Think of trustees, personal representatives, agents under a power of attorney, and guardians. The law expects loyalty to the person served, careful decision making, and honest reporting.
Three core duties guide the work: Duty of loyalty means no self-dealing; Duty of care means acting prudently, staying within your authority, and documenting choices; and Duty of disclosure means keeping clear records and sharing information that beneficiaries or the principal are entitled to see.
These duties protect elders, adults living with disabilities, and families going through challenging times. When adhered to, they keep property safe and preserve a legacy that reflects the true wishes of family members.
Power of Attorney: Responsibilities and Potential Liabilities
A Power of Attorney, often called a POA, lets an agent act on behalf of the principal. In Massachusetts, a properly signed POA can be durable, which means it continues even if the principal loses capacity, unless the document states otherwise. With that authority comes the same fiduciary duties a trustee would recognize.
Essential Rules for Agents Under a Power of Attorney
If you serve as an agent, a few ground rules help you stay safe and protect the principal’s interests.
- Always act in the principal’s best interest and follow the document’s limits.
- Sign the right way to avoid personal liability; for example, “Jane Doe, by John Smith, POA.”
- Give copies to banks or vendors, but keep the original in a safe place.
- Record the POA only when you handle a real estate sale or deed transfer.
- Skip joint accounts. Open accounts in the principal’s name, with you listed as agent or “POA.”
- Do not change beneficiary designations or other parts of the estate plan unless the POA clearly allows it.
- Keep detailed records of every dollar and save statements and receipts.
- Do not make gifts unless the POA document specifically permits gifting.
- File income tax returns and estimated payments on time for the principal.
- Stop acting if a guardian or conservator is appointed for the estate, or if the principal dies.
Those steps come from long experience handling POA disputes and align with best practices used by courts and financial institutions.
Breach of Fiduciary Duty Under a Power of Attorney
A breach happens when an agent puts personal interests ahead of the principal, acts outside the document, hides records, or uses the role to benefit themselves. Common red flags include unexplained cash withdrawals, changed beneficiaries, or refusal to share statements.
Consequences can be serious. An agent can be required to repay funds, cover losses, face removal, and in extreme cases, face a civil or criminal action. If you suspect a problem, do not wait—consult with counsel about your options under Massachusetts law.
Trust Accounting: Maintaining Transparency and Accountability
Trust accounting gives beneficiaries a clear record of what came in, what went out, and what remains. In Massachusetts, trustees often prepare periodic accountings that separate income from principal, then share them with interested parties or file them when a court requires it.
Core Components of Trust Accounting
A sound fiduciary accounting usually includes these parts, which match guidance often cited by courts and professionals:
- A statement of receipts and disbursements, split between principal and income.
- A statement listing assets on hand and any liabilities.
- A disclosure of the fiduciary’s compensation.
- Identification of agents hired by the fiduciary, any relationship, and what they were paid.
Good accounting keeps the peace. It also lowers risk for a trustee who, in good faith, shares accurate information and fixes issues promptly.
Massachusetts Uniform Principal and Income Act (UPIA)
Massachusetts has adopted the Uniform Principal and Income Act, which guides how to allocate receipts and expenses between income and principal if the trust document is silent or vague. This matters for fairness since current income beneficiaries and remainder beneficiaries can have different interests.
Under the UPIA, trustees have tools to make reasonable allocations, and courts often look to these rules when an accounting is questioned.
Fiduciary Litigation: Resolving Disputes and Protecting Beneficiaries
Fiduciary litigation arises when duties are ignored, assets are mishandled, or family members disagree on a trustee’s choices. Massachusetts courts look for breaches, losses tied to those breaches, and fair remedies.
Common Causes of Fiduciary Litigation
Disputes tend to follow recurring patterns, and spotting them early can prevent bigger harm.
- Breach of fiduciary duty
- Accounting disputes
- Will contests
- Challenges to the validity of a Power of Attorney
- Removal of a fiduciary
Each claim has its own proof and defenses, and the facts often turn on emails, statements, and the plain words of the governing document.
Remedies for Breach of Fiduciary Duty in Massachusetts
Courts can award compensatory damages, order repayment of misused funds, surcharge fees, and remove a trustee or agent from the role. In some cases, a judge can order an accounting or other relief to protect beneficiaries while the case moves forward.
Our firm at Casey Lundregan Burns, P.C., represents fiduciaries and beneficiaries across Massachusetts in these matters.
How Casey Lundregan Burns, P.C., Can Assist
For three generations, our firm has provided zealous advocacy and steady counsel in trust and estate work.
Call 978-878-3519 or visit our Contact Us page to connect with our firm.
Legal Disclaimer: The information provided in this blog post does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only.