A fiduciary is someone who is legally obligated to act in the best interests of another person. In the estate and trust context, fiduciaries include executors and administrators of estates, trustees of trusts, guardians of incapacitated persons, and conservators of protected persons. Each of these roles carries specific duties imposed by Mississippi law, and a fiduciary who fails to meet those duties can be held personally liable for the resulting harm.

Breach of fiduciary duty claims are among the most common and most consequential types of estate and trust litigation. They can involve amounts ranging from relatively small sums to tens of millions of dollars, depending on the size of the estate or trust and the nature and duration of the breach.

Fiduciary Duties Under Mississippi Law

Mississippi law imposes several distinct duties on fiduciaries. While the specific content of these duties varies depending on the type of fiduciary and the governing instrument, the core duties include the following.

Duty of Loyalty

The duty of loyalty is the most fundamental fiduciary obligation. It requires the fiduciary to act solely in the interests of the beneficiaries and to refrain from self-dealing or transactions that create a conflict of interest. A trustee who uses trust assets to benefit themselves, a family member, or a business associate is breaching the duty of loyalty even if the transaction is objectively fair. The rule is not that the fiduciary must get a fair price — the rule is that the fiduciary must not be on both sides of the transaction at all.

Common examples of loyalty breaches include a trustee purchasing trust assets for themselves or selling personal assets to the trust, a trustee hiring their own company to provide services to the trust, a trustee making loans from trust funds to themselves or related parties, an executor directing estate business to a company in which they have an interest, and a guardian using the protected person's funds for the guardian's personal expenses.

Duty of Prudence

The duty of prudence, sometimes referred to as the prudent investor rule, requires a fiduciary to manage and invest trust or estate assets with the care, skill, and caution that a prudent person acting in a like capacity would use in the conduct of an enterprise of like character and aims. This is not a guarantee against investment losses, but it does require the fiduciary to act reasonably, to consider the purposes of the trust, the interests of the beneficiaries, and the need for both income and growth.

Under the Mississippi Uniform Prudent Investor Act, which applies to trustees, the prudent investor standard is applied to the portfolio as a whole and in the context of the trust's overall investment strategy, rather than to individual investments in isolation. This means that a single investment that performs poorly is not necessarily a breach if it was part of a reasonable overall strategy. However, a fiduciary who concentrates trust assets in a single investment, fails to diversify, invests in speculative or unsuitable assets, or fails to monitor the trust's investments may be liable for breach of the duty of prudence.

Duty to Account

Fiduciaries have a duty to keep accurate records and to provide accountings to the beneficiaries. In Mississippi, a trustee must provide accountings at least annually and upon request by a qualified beneficiary. An executor or administrator must file inventories and accountings with the chancery court as required by law. A guardian or conservator must file annual reports with the court.

The failure to provide accountings is itself a breach of fiduciary duty, and it is often a red flag for other problems. Fiduciaries who refuse to account or who provide incomplete or inaccurate accountings may be concealing self-dealing, mismanagement, or outright theft. When a fiduciary fails to account, the beneficiaries may petition the court to compel an accounting and may also request that the court draw adverse inferences from the fiduciary's failure to provide information.

Duty of Impartiality

When a trust or estate has multiple beneficiaries, the fiduciary has a duty to act impartially, balancing the interests of current beneficiaries against the interests of future beneficiaries unless the governing instrument directs otherwise. This duty is particularly relevant in trusts that provide income to one beneficiary (often a surviving spouse) and the remainder to other beneficiaries (often children from a prior relationship). The trustee must balance the income beneficiary's need for current income against the remainder beneficiaries' interest in preserving the trust principal.

Duty to Inform

Beyond the duty to account, fiduciaries have a broader duty to keep beneficiaries reasonably informed about the administration of the trust or estate and about material facts necessary for them to protect their interests. This includes providing information about significant transactions, changes in the trust's investments, and other matters that affect the beneficiaries' interests.

Proving a Breach of Fiduciary Duty

A breach of fiduciary duty claim generally requires proof of three elements: the existence of a fiduciary relationship, a breach of one or more fiduciary duties, and damages caused by the breach. Each element can involve significant factual and legal complexity.

The existence of the fiduciary relationship is usually not disputed — someone was appointed as trustee, executor, or guardian, and that fact is typically a matter of record. The breach itself is where most of the litigation occurs. This requires identifying what the fiduciary did or failed to do, what standard of conduct applied, and whether the fiduciary's conduct fell below that standard.

Proving damages in fiduciary breach cases is often the most challenging aspect. The plaintiff must demonstrate not just that the fiduciary breached a duty, but that the breach caused actual financial harm. This may require expert testimony on issues such as the performance that should have been achieved with prudent management, the value of assets that were lost or impaired, the amount of self-dealing profits that should be disgorged, and the lost income or growth that resulted from the breach.

The firm's financial and tax background is directly relevant to the damages analysis in these cases. Tracing funds, analyzing transactions, evaluating investment performance, and calculating losses requires the kind of financial literacy that comes from actual experience in financial management and tax practice — not just familiarity with the legal standards.

Remedies for Breach of Fiduciary Duty

Mississippi law provides several remedies for breach of fiduciary duty, and the appropriate remedy depends on the nature of the breach and the circumstances of the case.

Surcharge is the most common remedy. A surcharge is a monetary judgment against the fiduciary personally for the losses caused by the breach. If a trustee made imprudent investments that lost $500,000, the trustee can be surcharged for that amount. If an executor engaged in self-dealing and profited by $200,000, the executor can be required to disgorge those profits.

Removal of the fiduciary is another common remedy, either in addition to or instead of surcharge. As discussed on the Trust Litigation page, courts can remove a trustee for serious breach of trust, and similar provisions apply to executors, guardians, and conservators.

Injunctive relief may be available to prevent ongoing or threatened breaches. If a fiduciary is about to sell trust assets in a self-dealing transaction, for example, the court may issue an injunction to prevent the sale from occurring.

Accounting and disclosure remedies can be sought when a fiduciary has failed to provide information to the beneficiaries. The court can compel an accounting and can impose sanctions for noncompliance.

Attorney's fees and costs may be recoverable in some fiduciary breach cases, depending on the circumstances and the applicable law.

Defending Against Breach of Fiduciary Duty Claims

The firm also represents fiduciaries who have been accused of breach. Not every claim of fiduciary misconduct is meritorious, and fiduciaries are entitled to a vigorous defense. Common defenses include that the fiduciary's conduct was authorized by the trust instrument or by court order, that the fiduciary acted in good faith and with reasonable care, that the alleged breach did not cause the claimed damages, that the beneficiary consented to or ratified the conduct, and that the statute of limitations has expired.

Defending a fiduciary requires the same integrated understanding of law, finance, and tax that is needed to prosecute these claims. The firm is equipped to handle both sides of fiduciary litigation.

If you have questions about a potential breach of fiduciary duty claim in Mississippi, whether you are a beneficiary or a fiduciary, the inquiry form is the best place to start.