What to do if my mother passed away 4 months ago leaving my oldest sister trustee of her living Trust but money is missing and few debts have been paid off?

After cashing in my mother’s stock and depositing it with what money my mother had in her checking account, there was $31,000. The trust stated all monies left after her debits were paid was to be split equally between my 2 sisters and I, including the money that would come from the sale of her home (it is presently on the market). I became concerned about how my sister was spending the money when I found out the account was down to just over $6,000 and no large accounts have been paid off. I don’t know what to do; if I approach her about it she will only deny it.

Asked on August 23, 2013 under Estate Planning, California

Answers:

M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 7 years ago | Contributor

Trustees are expected to fulfill certain obligations to the parties involved and to fulfill their "fiduciary duties".  These obligations/duties include such things as:

  • Not using the funds for their own private purposes;
  • Avoid commingling Trust assets with personal assets;
  • Being fair and impartial and not desiring to profit from the relationship;
  • Maintaining accurate records, etc.

 

A Trustee who violates their duties can:

  • Be removed from their position and replaced by another trustee;
  • Required to pay damages for Trust losses due to their breach of duties; and
  • Possibly face criminal charges, depending on the nature and extent of the breach.

 

On the face of it, it would appear that your sister has breached her fiduciary duty. Accordingly, you can go to the probate court involved and ask for her to be removed and replaced. Aditionally, as a beneficiary you may bring a suit against her in court for any damages suffered by you as a result of her breach.

Since this can all get a bit complicated, you really should consult directly with an attorney who practices in the area. They can best inform you of your rights/remedies. 


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