Trustees hold a vital position of responsibility and must act in the best interests of the beneficiaries. However, what happens when this trust is broken, and funds are misappropriated or stolen?
An event like this can be incredibly frustrating to you and your family, but even more pressing are the financial losses of the beneficiary. Stolen funds, no matter how small, can have a huge impact on their ability to meet their financial needs.
With that in mind, what can you do if your loved one’s trustee steals or mismanages their trust?
Gather evidence of the theft
Start looking into your loved one’s trust at the first sign of theft or mismanagement. Document suspicious activities, such as:
- Unexplained withdrawals
- Large gifts to the trustee
- Unapproved investments or sales of assets
- Sudden amendments to the will or trust that favor the trustee
Review all the records and if possible, request a formal accounting from the trustee. If they refuse, it could be a sign of fraudulent activity.
You should also look for signs of undue influence to see if it is the cause behind unexplained transactions. Potential signs may include the trustee isolating your loved one from friends and family, overdependence on the trustee and uncharacteristic behavior, such as giving away large sums of money for no reason.
File a petition to remove the trustee
If you have enough suspicion that the trustee is mismanaging or stealing your loved one’s funds, you might consider removing them completely. To do so, you must file a petition with the court detailing allegations of financial mismanagement, theft and/or undue influence.
Filing a petition can also help your family recover stolen funds. However, in some cases, a lawsuit may be more appropriate. You can sue the trustee for breach of fiduciary duty to remove them from the trust and seek damages apart from the missing funds.
Consider mediation
If your family wants a quicker resolution without further conflict, mediation can be a more suitable route. It can also be less expensive than a lawsuit, which can help avoid even more financial losses for the family.
Regardless of the action you choose, having reliable legal guidance can help make the process easier. With an experienced attorney by your side, you can hold the trustee accountable for their actions and do what is best for your family.