Is your trustee protecting the beneficiaries’ assets?
Unfortunately, there are trustees who intentionally or inadvertently do the wrong thing and your assets may consequently be diminishing, or worse, be misappropriated.
Estate planning usually resolves to creating a trust to protect assets for the sake of beneficiaries. This structure normally avoids the lengthy processes of probate. Assets held in trust should be administered by a nominated trustee with fully accountable transparency, and depending on the nature of the assets, they should be managed with the intent on maintaining or growing the assets’ value, and not diminishing the assets’ value.
The administration of a trust can be a complicated task and beneficiaries and grantors alike place significant dependence in the trustee. Simply put, the trustee is the individual who has the responsibility of administering a trust. A trustee also has a significant amount of control over trust assets and conflicts often arise between other interested parties, such as beneficiaries and trustees regarding the way a trust is administered. A trustee has a fiduciary duty to the trust beneficiaries, which is the highest duty that is imposed by law. It requires the trustee to always act in the best interest of the beneficiaries and prohibits a trustee from profiting from their relationship with the beneficiaries in the absence of expressly informed consent.
When conflicts or other issues arise regarding the way in which a trust is administered, it may become necessary for the beneficiary or beneficiaries to take steps to remove the trustee.
Circumstances for trustee removal usually include:
- Not providing documents or information.
A trustee has a duty to keep the beneficiaries reasonably informed regarding the state of the trust and its administration under California law. Failure to provide documents or information may constitute a breach of this duty, potentially justifying removal.
- Not making the required distributions.
Many trusts are set up in such a way as to provide for the needs of the trust beneficiaries. Since the trustee holds legal title to the trust assets, he or she may potentially fail to make distributions that are required by the terms of the trust. When this occurs, it may be possible to remove the trustee.
- Mismanaging trust assets.
A trustee has a duty to manage trust assets in such a way as to prevent depreciation or waste. If a trustee breaches that duty due to his or her negligence or inability to effectively manage the trust, the beneficiaries may have justification to remove the trustee.
- Stealing trust assets.
Stealing trust assets is a legitimate reason to remove a trustee, as it is a clear breach of a trustee’s duty to act solely in the interest of the trust beneficiaries.
Contact a San Diego trust and estate litigation attorney today to retain legal counsel
Beneficiaries who believe that they may have grounds to remove a trustee should speak with an attorney as soon as possible. San Diego trust attorney Byron Husted is a skilled litigator who seeks to find alternative resolutions to his clients’ legal disputes in order to solve them in the most efficient way possible, and may include litigation or mediation or a combination of both.
To schedule a consultation with Mr. Husted, call our office today (619) 826-8060 or send him an email at firstname.lastname@example.org.