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Lack of Capacity

Trusts, wills and, powers of attorney documents are vital instruments used in estate and trust planning. These documents determine how assets are managed and distributed to beneficiaries, grantors or incapacitated individuals that receive monetary benefits from the estate assets. The individuals who manage these assets – whether trustees or executors – are known as fiduciaries and they are obligated to follow the instructions set forth in the documents to protect grantor and beneficiary rights.

Obligations of trustees and executors are known as fiduciary duties, and some of the most important of them include:

  • Duty of loyalty, meaning a fiduciary must avoid conflicts of interest and refrain from self-dealing
  • Duty to provide information that includes accounting, inventory, asset custody, fiduciary fees, and asset distributions
  • Duty to monitor and manage assets following prudent man and securities industry standards

Incapacitation and the elderly

Trusts, wills, and power of attorney documents are especially critical to the well-being of the elderly. As individuals age, these estate planning documents ensure that the management and distribution of assets continues in the event the individual becomes incapable of communicating his or her specific desires. By selecting a trustee and delegating these tasks, elderly individuals can help protect their assets and ensure their wishes are carried out.

Even though the duties assigned to these fiduciaries are absolute, sometimes these trusted individuals willfully neglect their responsibilities and capitalize on the incapacitation of their clients by such actions as:

  • Abusing confidential relationships
  • Fraud and deception
  • Exerting undue influence
  • Coercion or causing duress
  • Professional negligence

Examples of breach of a fiduciary duty by a trustee or an executor include:

  • Failure to make distributions
  • Conflict of interests
  • Taking money from the trust
  • Failure to administer the trust
  • Acting in self-interest
  • Abuse of discretion regarding discretionary distributions

Protecting those with lack of capacity

There are rules that trustees and delegated financial advisors must abide by to protect trusts and their beneficiaries from investment losses. These include the prudent investor rule, securities industry rules, and rules enforced by civil courts. When these rules are not followed, victims and/or their loved ones can seek recourse through litigation or securities arbitration and potentially recover financial losses.

It is important to understand that elderly or incapacitated victims of financial fraud have rights. If you or a loved one feel that you have been wronged due to elder fraud, abuse, or exploitation, you may be able to recover some or all of your losses.

The attorneys at Silver Law Group are leaders in the field of securities arbitration and elder financial fraud cases. We represent individual and institutional investors across the United States who have lost money at the hands of a trusted financial advisor. Contact us today to discuss your options.

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