What are the possible consequences of a breach of fiduciary duty?
A breach of fiduciary duty is a violation of the trust between two parties in which an individual or organization takes advantage of their position as a trustee to benefit themselves instead of their beneficiary. In California, a breach of fiduciary duty is considered a serious offense with serious consequences. The most common consequence of breaching fiduciary duty in California is a civil lawsuit, which could be filed by the beneficiary against the trustor. The beneficiary would be entitled to be repaid for any losses suffered and could also receive punitive damages if found that the breach was intentional. Additionally, any benefit the trustor gained from the breach could be forfeit. If the breach was minor, the court may decide to reallocate assets or modify the trust agreement, as well as award the beneficiary reimbursement from the trustor. If the court finds that the breach was the result of negligence, the trustor would need to make their best effort to return the beneficiary to the same position they would have been in had the breach not occurred. Breaching fiduciary duty may also result in criminal charges. These charges could be applied if the breach was intentional and resulted in financial harm. In such cases, the trustor could face fines and even jail time. Additionally, any losses incurred by the beneficiary can be recovered through a civil lawsuit. Regardless of the severity of the breach, it is important to seek legal advice and resolve the situation as soon as possible. This will help to minimize the consequences of a breach of fiduciary duty in California both for the trustor and the beneficiary.
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