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What should you do about the misappropriation of a trust?

On Behalf of | Jan 25, 2022 | Estate Administration

The misappropriation of a trust and the assets it holds is a serious problem that could lead to criminal penalties for the trustee. Trustees who embezzle funds or remove assets may be held personally liable for doing so.

If you believe that a trustee has embezzled or stolen from a trust, you have the option of suing them for breaching their fiduciary duty. To do this, you will need strong evidence that the individual did commit the crime against the trust and its beneficiaries.

What kinds of questions will you need to be able to answer when you talk to an estate planning attorney?

To be able to determine if you have a case, your attorney may ask you a few different questions such as:

  1. Do you know when the theft occurred? Did it happen before or after the inventory of the estate?
  2. What makes you think that trust funds have been misappropriated?
  3. When was the trust created?
  4. Do you have a copy of the trust?
  5. Have you requested records, like valuations of assets or bank records, to help support your claim?
  6. Is the trustee speaking with you? If so, are they updating you on questions you had about assets that seem to be missing?

These and other questions will help your attorney have a better understanding of what’s happening and if there is potential breach of fiduciary duty that has to be considered. Let your attorney know as much about the case as you can, so they can make a good assessment. Then, they can take further action to investigate.

It’s necessary to get an update on the current standing of a trust and the assets it contains when you want to make a case. You will need to email or send a letter to the trustee asking for an update. If the trustee doesn’t respond or does respond with an update that is inconsistent with what the trust should contain, then you may have a stronger case and be able to discuss options for resolving the dispute inside or outside of court.

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