Can a trustee be held responsible for assets carelessly depleted against settler’s wishes?
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Can a trustee be held responsible for assets carelessly depleted against settler’s wishes?
My elderly mother was unduly influenced into hiring a professional trustee to
manage her assets placed into a revocable trust. She has a small amount of
income from a couple of rental properties and her social security. I take care
of a stroke patient and can’t be with her 24/7 to prevent people from taking
advantage of her. The live-in home care agency they hired is 15,000.00 per
month and rapidly depleting all her money and soon she will be out of property
with nothing left as the trustee is selling off everything she worked hard for
her entire life to pay for the care. I have tried to work with the trustee to
hire some of my trusted friends and family to take the in-home care job as well
as a woman who was her helper for over 25 years. The trustee road blocks me by
saying that they can’t have unlicensed/unbonded care givers. They have spent a
half a million dollars from the sale of one of her properties in less than 8
months. They aren’t trying to preserve the trust, they aren’t investing
anything or looking out for my mother’s best interests or the beneficiaries of
the trust myself. I presume they collect as many elderly people’s finances as
possible to become clients and then just do the easiest thing until the money
runs out, and then I guess they would throw mom into a state funded rest home.
Isn’t there anything that can be done to stop this runaway horse from depleting
everything that my mom used to own? Are they in breach of fiduciary duties by
allowing this to happen as well as not working with me to help reduce expenses?
I have expressed concern in written letters and didn’t get any response until a
year later when they road blocked my suggestions. They also have their own
services, attorneys and other people I’m certain have large fees to eat up even
more money. At this rate, mom will be broke in under 3 years and what used to
be more than enough for her and myself to live out the rest of our lives
comfortably will be gone. I have always provided for my own needs but am on
social security as well. Losing the home my father built years ago will break
my heart but it will literally kill me to see mom get put in a rest home as I
am elderly also and already maxed out taking care of my half paralyzed husband.
Any suggestions would be greatly appreciated.
Asked on June 10, 2017 under Estate Planning, California
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 6 years ago | Contributor
If your mom is mentally competent, she as the beneficiary of the trust can bring a lawsuit for an "accounting"--to hold the trustee accountable for his actions. He is bound by a "fiduciary duty" to act in the interests of the beneficiaries and as per the trust's instructions or organizing documents, and if he fails to do so, can be removed as trustee and/or forced to repay the wrongfully taken or wasted amounts.
If you are also a beneficiary under the trust, you could bring this action yourself. If you mother is the only beneficiary, only she can bring it, though if mentally competent, she could give you a power of attorney to have it brought on her behalf (such as if she doesn't want to personally go through the stress of challenging the trustee). If she is mentally incompetent, you'd have to first have her legally declared incompetent (based on medical evidence), then have yourself (hopefully!) declared her legal guardain, to have the authority to take action.
(Note: if you bring an action for your mother--i.e. not in your name--you'd need to hire a lawyer; a non-lawyer can only legally represent him- or herself in court, not another person).
If it is a revocable trust, another option is to revoke it: speak with a trusts and estate's attorney who can evaluate this option for you and, if appropriate, guide you in doing it.
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