Conflicts of Interest

Fiduciaries such as personal representatives and trustees are supposed to serve the needs of their beneficiaries. But sometimes competing needs and interests interfere. A trustee or personal representative may have personal, family, or business interests that interfere with their neutral, impartial judgment.

Conflicts of interest can arise in Florida business settings, in partnerships, with a board of directors, or fellow shareholders or members of LLC’s. How are your partners and business investors treating you?

Examples:

• A family member is named to serve as trustee, but he went through a bitter divorce from one of the named beneficiaries of the trust. He is now paying spousal support to that beneficiary. Can he fairly and impartially administer the trust for the benefit of all beneficiaries?
• An adult child is named trustee of a trust that benefits her stepmother. The adult child and her descendants will inherit whatever assets are not spent during the life of her stepmother. Can she fairly and impartially administer the trust for the benefit of her stepmother?
• A trustee hires his spouse to list trust real property for sale. The spouse’s company will receive the sales commission and the spouse will get a bonus. Is that appropriate?
• A personal representative wants to maintain the estate’s ownership of a family-owned business where he works even though it is declining in value. Can he do so without violating his duties to the beneficiaries?
• A major bank’s trust department is appointed to administer a trust for the benefit of several beneficiaries. One of the beneficiaries is a major customer of the same bank’s private wealth department. Will the bank make decisions that are fair to the other beneficiaries?