What to do if my sister, who is the trustee to my father’s irrevocable living Trust, had been living in our parents’ home for about 1 1/2 years but never paid rent?

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What to do if my sister, who is the trustee to my father’s irrevocable living Trust, had been living in our parents’ home for about 1 1/2 years but never paid rent?

She told us she had been paying $700 rent a month (no lease agreement…tenant at will). Supposedly the rent payments were direct deposited into the estate account. However, she never showed any of us kids monthly statements of any of the accounts. We recently quit deeded the properties to all of us kids, including her. Within 2 weeks of meeting with the attorney who assisted us in drafting the deed, my sister moved out of the house without telling anyone or where she was moving to. Is there anything we can do to recover rental payments that were not deposited into the account?

Asked on May 9, 2015 under Estate Planning, Wisconsin

Answers:

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

Answered 5 years ago | Contributor

A Trustee has a duty to act in a "fiduciary" capacity when it comes to dealing with Trust matters. Accordingly, among their legal obligations, they must preserve and protect assets of the Trust. Therefore, to the extent that the Trust lost out on income because your sister filed to pay rent while residing in your late patents' home, she has breached her duty. As a result, suit can be brought against her for the amount of lost income, interest that could have been earned on it and any incidental expenses caused by her nonpayment.


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