Welcome to CPA at Law, helping individuals and small businesses plan for the future and keep what they have.

This is the personal blog of Sterling Olander, a Certified Public Accountant and Utah-licensed attorney. For over thirteen years, I have assisted clients with estate planning and administration, tax mitigation, tax controversies, small business planning, asset protection, and nonprofit law.

I write about any legal, tax, or technological information that I find interesting or useful in serving my clients. All ideas expressed herein are my own and don't constitute legal or tax advice.

Legal Pitfalls for Inexperienced Fiduciaries

As a simple local news search will reveal, criminal charges are regularly brought against fiduciaries who have allegedly breached their fiduciary duties. Criminal charges in the area of estate and trust administration could include unlawful dealing of property by a fiduciary and financial exploitation of a vulnerable adult.

The former is committed when a fiduciary "deals with property that has been entrusted to him as a fiduciary... in a manner which the person knows is a violation of the person's duty and which involves substantial risk of loss or detriment to the owner or to a person for whose benefit the property was entrusted." The latter is committed when anyone, among other things, "unjustly or improperly uses or manages the resources of a vulnerable adult for the profit or advantage of someone other than the vulnerable adult..."

There are obvious examples of cases where a fiduciary admits to using trust funds for personal use and criminal charges are warranted. However, it is not difficult to imagine a scenario where an inexperienced fiduciary has good intentions but doesn't keep a proper accounting or invests trust funds imprudently and a vindictive beneficiary seeks criminal charges.

An inexperienced trustee should clearly be held to account and restore, but there are civil remedies and civil damages available to beneficiaries that seem more appropriate as a first resort. Any fiduciary would be well-advised to seek legal counsel to avoid civil or criminal issues arising from their service.