What to do about a trustee who is violating the terms of the trust?

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What to do about a trustee who is violating the terms of the trust?

My mother passed away last year and had a Living Trust set up for my 2 brothers and I; 1 brother is the executor. He told me that he plans on charging us for all the time he put in for caring for our mother. I live out of state so this was not possible for me. He says he is planning on taking it from our shares (myself and my other brother). Can he do that? The trust spells out pretty specifically how the money is to be divided between the 3 of us. I’ve also found out that he has distributed money from the trust to people who aren’t even named in the trust. Isn’t that wrong?

Asked on May 1, 2011 under Estate Planning, Michigan

Answers:

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

Answered 10 years ago | Contributor

Sorry to hear about your mother.

You and your other sibling could sue the trustee for breach of fiduciary duty (breach of trust).  The trustee is to comply with the terms of the trust.  The trustee cannot take a portion of your shares and your other brother's share to compensate himself or distribute funds to others who are not named as beneficiaries of the trust.  Your lawsuit against the trustee should seek a constructive trust.  A constructive trust would require that any funds wrongfully taken by the trustee and/or wrongfully distributed to others be returned to the rightful owners (you and your other sibling), the beneficiaries.

There should also be a provision in the trust setting forth procedures for removal of the trustee and appointment of a successor trustee.  You and your other sibling should follow those procedures for removal of the present trustee and appointment of the successor trustee.  The trust provisions should have designated a successor trustee.


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