What can be done if a trustee spent the Trust money?

Asked on July 4, 2014 under Estate Planning, California

Answers:

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

Answered 6 years ago | Contributor

A trustee is legally obligated to use their best efforts to administer and manage the assets of the Trust. A trustee who is not meeting their legal obligations either through negligence or willful misconduct and be sued for breach of their "fiduciary duty". Should a trustee be held in breach, there are a number of specific civil and/or criminal consequences, along with special damages, as well as being relieved of their duties. The more information you can provide documenting the possible breach the better.

The first thing to do is to request an accounting of Trust assets. After a review of such an accounting, if there is a pattern of suspicious activity taking place, the next step would be to file a court complaint in order to present your case and explain why the trustee is in breach of their fiduciary duty. If the court agrees, the trustee may be held accountable and may be liable for any losses or for any misappropriated income or assets (and as stated above, there may also suffer other civil/criminal consequences).

That all having been said, you should be aware that wrongfully bringing a complaint against a trustee who is simply refusing to give in to a beneficiary's demands, can result in the judge assessing court costs against that beneficiary. The fact is that this is the time to consult an attorney who specializes in such matters. They can best advise you according to the specifics facts of your situation.


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