Trust fund for the mentally disabled

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Trust fund for the mentally disabled

My step-brother has a trust fund that was set up by his deceased mother and deceased grandfather. His uncle is in charge of the Trust fund. Does his uncle have to prove where the money is being spent? He gives my step-brother no money. His wife also told my step brothers Mom before she passed that it needed to be taken out of the uncle’s name because he said my step-brother would never see a dime of the money. The uncle would spend it on his daughters.

Asked on December 7, 2017 under Estate Planning, Georgia

Answers:

S.L,. Member, California Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

The trustee has a fiduciary duty to make the payments to your step-brother, the beneficiary, pursuant to the terms of the Trust.  
The trustee has breached a fiduciary duty and should be sued for conversion (theft in a civil case).  It is NOT necessary for the uncle (trustee) to prove where the money is being spent.
If the Trust includes procedures for removal of the trustee and appointment of a successor, those procedures should be followed.  If the Trust is silent on that issue, the court can remove the trustee and appoint a successor.
A lawsuit should be filed on behalf of your step-brother against the trustee for breach of fiduciary duty and conversion.  The remedy is to seek a constructive trust against the uncle which would require the uncle to return the stolen funds to the Trust.  The constructive trust can be used to trace the stolen funds to any acquisitions and those items or their value are to be returned to the Trust.  In addition, the lawsuit should also seek removal of the uncle as trustee and appointment of a successor trustee.
 


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