What can you do when a trustee abuses a trust?

On Behalf of | Mar 26, 2020 | Trust And Probate Litigation

If your parent or loved one creates a trust, they will appoint a trustee based on that person’s responsibility. In most cases, the trustee will execute their duty as expected. But some trustees use trusts as their personal piggy bank. They may drain its assets to pay for bills and luxuries. Or they may disburse the trust in a manner that goes against the wishes of its creator. These events are a breach of fiduciary duty, which means the trustee has failed their legal obligation to the trust.

If you’re the beneficiary of a trust, it’s wise to remain vigilant to any breach. If you suspect the trustee has committed one, you can keep these tips in mind to detect it and hold them responsible.

Dealing with an untrustworthy trustee

Because the trustee may have an iron grip on the trust, it can be difficult to prove when they’ve breached their duty. Yet the trustee may have done so if they:

  • Allowed their assets to commingle with the trust
  • Made decisions about the trust based on personal interest
  • Manipulated, hid or failed to keep accurate records of the trust’s finances

If you catch the trustee abusing the trust, you can file a complaint against them. You must make this claim within one year of discovering the breach, and you will resolve it in court. The trustee may face severe consequences if they’re found guilty. These repercussions could include:

  • Removal from their role as trustee
  • Payment of fines or compensation to beneficiaries affected by their mishandling
  • Jail time, if the breach included criminal actions

Finding someone to put your trust in

Upon a trust’s creation, the trustee must prove they’re trustworthy for the role. If they breach and abuse the trust, you have the responsibility to make matters right. Working with an estate planning attorney can help you pursue a breach of fiduciary duty.